SYNDACATE 1 YP68C

Nabilla Putri Novella 29122301

Moh Akhim Bayu H 29122322
Owen Jacob Notonugroho 29122354
Nabilla Vynka Fakhira 29122359

Accounting
a) Income Statementfor 2015

Counting Crows Inc

Income Statement
Fotr The Year Ended January 31, 2015

Sales Revenue £1.900.000

Cost of Goods Sold

£850.000

Gross Profit
£1.050.000

Selling Expenses
300.000

Administrative Expenses
240.000

510.000
Income Before Other Items

Rent Revenue
40.000

Gain on Sales of Investment 62.700

Less: Income Tax

Applicable to Unrealized
Holding Gain on Non- (2.000)
Trading Equity Securities

Income Before Tax

610.700

Income tax applicable to

187.000
continuing operation
 Income from continuing 423.700
operation

Loss on discontinued
Operation (75.000)

Income tax benefit

applicable to loss on
25.500
discontinued operations

Net Income £374.200

Earnings Per Share

Income from continuing

4.23
operations

Loss on discontinued
0.75
operations, net of tax

Net Income
3.74

b) Retained earnings statements for 2015

Counting Crows Inc

Retained Earnings Statements
For The Year Ended January 31, 2015

Retained Earnings, January 1, as £600.000

reported

Net Income £374.200

Cash Dividend Declared £ (80.000)

Retained Earnings, December 31 894.200

c) Statement of comprehensive income using the two statement format.

 Counting Crows Inc
Income Statement
For The Year Ended January 31, 2015

Sales Revenue £1.900.000

Cost of Goods Sold £850.000

Gross Profit £1.050.000

Operating Expenses £540.000

Net Income 510.000

Counting Crows Inc

Comprehensive Income Statements
For The Year Ended January 31, 2015

Net Income 510.000

Other comprehensive income

Unrelized holding gain non-trading equity 17.000

Securities, net of tax

Comprehensive Income 527.000

Analysis
a. Evaluate past performance
Assessing profitability from subheads that we can see the revenue of the company such as
"Sales," "Cost of Goods Sold," and "Gross Profit" can be used to determine a company's overall
profitability. also we can evaluate the efficiency of the company from subheads such as
"Selling, General and Administrative Expenses" can be used to assess a company's efficiency
in controlling overhead costs.
b. Predict future performance
Identifying trends: By comparing subheads over time, readers can identify trends in a
company's revenue and expenses, which can provide insight into its financial health..
Detecting potential issues: Subheads such as "Bad Debt Expense" can highlight potential
problems, such as an increase in uncollectible accounts.

Principles
The pro forma income statement is created methodically by removing certain financial inputs
to demonstrate what the business income statement would look like if certain inputs were
removed. Based on the conceptual framework, the following are some qualitative
characteristics of accounting information:
Fundamental Qualities
1. Relevance
Relevancies, as a qualitative feature of a financial statement, has three components:
predictive value, confirmatory value, and materiality. A pro forma income statement is
essentially an adjusted financial statement for a company. It contains financial data or
value that can be used as an input to predictive processes or analyzed by users or
potential users to form future expectations about Counting Crows, Inc. [predictive
value]. Pro forma also contains information that assists users or potential users in
confirming or correcting their expected financial situation in year-end financial
statements [confirmatory value]. A pro forma income statement contains information
that is deemed material. Because if the information (or some of the information) is
omitted or misstated, it may influence the users' decisions based on the information.
2. Faithful representation
Financial information and descriptions must be accurate to reflect what actually
occurred or existed. This characteristic has its own set of ingredients, which are
completeness, neutrality, and error-free. In terms of completeness, a pro forma income
statement may be inconsistent. Pro forma financial statements may contain information
that does not comply with GAAP or IFRS, which are both sets of guidelines used by
public companies to prepare their financial statements. A financial statement cannot be
considered complete if information that could mislead readers is omitted
[completeness]. Furthermore, in terms of neutrality, pro forma can be both consistent
and inconsistent. Counting Crows, Inc. can benefit from omitted information. However,
in order to be neutral, accurate information must be provided.

Enhancing Qualities
1. Comparability
Pro forma reporting contradicts the conceptual framework's qualitative feature of
comparability. Investors and creditors will struggle to compare if Counting Crows, Inc.
classifies some items within its financial statements in a pro forma manner but other
companies do not.
2. Verifiability
The verifiability characteristic is consistent with pro forma reporting. Using a pro forma
method does not imply changing the inputs or outputs. Counting Crows, Inc. would
have used the same figures or information in the statements. Unless they want to be
charged with fraud under the law, because using pro forma data to misrepresent GAAP-
based results and mislead investors is illegal and punishable by law, according to the
U.S. Securities and Exchange Commission (SEC)..
3. Timeliness
 The timeliness characteristic is consistent with pro forma reporting. Because a pro
forma financial statement also serves to attract potential investors, creditors, and even
current investors to the firm. It must provide users with information so that they can make
informed decisions. They must, therefore, make relevant information available as soon as
possible because its ability to influence decisions may be enhanced and its utility may be
diminished by a lack of timeliness..
4. Understandability
The understandability characteristic is consistent with pro forma reporting. Because, in
order to attract potential users, they must provide clear and concise information in order
to improve its quality and allow readers to easily understand the information provided. It
is pointless for Counting Crows, Inc. to provide unclear and difficult-to-understand
information if the company wishes to attract investment. As a result, it is the responsibility
of a company to put more effort into creating understandable information in its financial
statements.