The following is information for Martinez Corp. for the year
ended December 31, 2017:
Net sales revenue | $1,380,000 | Loss on inventory due to decline in net realizable value (NRV) | $84,000 | |||
Unrealized gain on FV-OCI investments | 40,000 | Loss on sale of equipment | 40,000 | |||
Interest income | 8,000 | Depreciation expense related to buildings omitted by mistake in 2016 | 53,000 | |||
Cost of goods sold | 828,000 | Retained earnings at December 31, 2016 | 900,000 | |||
Selling expenses | 69,000 | Loss—other (due to expropriation of land) | 63,000 | |||
Administrative expenses | 46,000 | Dividends declared | 43,000 | |||
Dividend revenue | 19,000 |
The effective tax rate is 25% on all items. Martinez prepares
financial statements in accordance with IFRS. The FV-OCI
investments trade on the stock exchange. Gains/losses on FV-OCI
investments are recycled through net income.
QUESTION: Prepare a multiple-step statement of comprehensive income for 2017, showing expenses by function. Ignore the calculation of EPS.
Solution:
Income statement | ||||
(in USD) | ||||
Particulars | Amount | |||
Revenue | ||||
Net sales revenue | 1380000 | |||
Interest income | 8000 | |||
Dividend income | 19000 | |||
total revenues | 1407000 | |||
Expenses | ||||
Cost of goods sold | 828000 | |||
Selling expense | 69000 | |||
Adminstrative expense | 46000 | |||
Loss on inventory | 84000 | |||
Loss on sale of equipment | 40000 | |||
Loss -other | 63000 | |||
Total Expenses | 1130000 | |||
Net income before taxes | 277000 | |||
Income tax | 69250 | |||
Income from continuing operations | 207750 | |||
Other comprehensive income | ||||
Unrealised gain on PV-OCI | 40000 | |||
Other comprehensive income | 40000 | |||
Total comprehensive income | 247750 | |||
Depreciation expense of 2016 to be adjusted with opening retained earnigs |
The following is information for Martinez Corp. for the year ended December 31, 2017: Net sales...
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