Chapter 2: Statement of Comprehensive Income

Results of the Company’s Operations

The SCI (Statement of Comprehensive

Income) is statement that reports the results of
operations of the business for one accounting
period.
 Components of the Statement of
Comprehensive Income

The SCI is an action-packed financial statement.

In contrast, the SFP is still photograph. The SCI is a
statement that explains some of the changes that
occur between two SFPs taken one year apart.
What are the actions reported on the SCI?

Income and Expenses are the general terms used to

describe the elements of the SCI.
Income – refers to a transaction that increases assets and/or
decreases liabilities leading to increase in equity resulting from
the operations of the business and not from the owner’s
contribution.
Expenses – are the transactions that decrease assets and/or
increase liabilities leading to decrease in equity resulting from
the from the operations of the business and not because of the
distributions to owners.
Friendly Convenience Store Income
1. Maria Reyes, the regular customer of Juana Dela Cruz. Maria
purchased 3 small cans of sardines that Juana sells for P25
each. Maria asked Juana to include it in her account. Juana
purchased the sardines from her wholesale supplier at P15
per can.
2. Pedro Benitez who rented small space on the store’s
countertop for his coffee vending machine. On October 1,
20X1, he paid six months advance rental of P500 per month.
3. Juana Dela Cruz owner of the store , deposited P1,000 to the
store’s savings account from her personal account.
1. Analysis of the transaction with Maria Reyes:

Decrease Inventory 3 x 15 P(45.00)

Increase account 3x25 P75.00
receivable
Net effect on total asset P30.00

Conclusion: This transaction met the definition income. Asset increase by

P30. This increase resulted from the operations of the store and not
contribution from the owner. Hence, this transaction should be counted as
income.
2. As of December 31, 20X1, the earned rent will have a balance
of P1,500 (P500x3). Its original balance is P3,000 (P500 x 6)
representing the 6 months advance rent paid by Pedro Benitez.
Liability decreased by P1,500 which is the rent from October to
December. This met the definition of income. A decrease in
liability from the operations of the business.

3. The asset, specially cash, will increase by P1,000. However,

this is a contribution from the owner and therefore not
reportable as income.
 Two Kinds of Income
• Revenue
– Are income generated from the primary operation
of the business.

• Gains
– Are income derived from other activities of the
business.
 Two Kinds of Expenses

• Expenses
– Are related to the primary operations of the
business

• Losses
– Are from other activities of the business