Question

Lawrence corporation provides the following partial trial balance for the current year.

Prepare a statement of net income and additional disclosures that would meet IFRS requirements. Indicate items that IFRS requires to be reported on the statement of net income. Lawrence is subject to % 40 income tax rate. Use the condensed format.

Begin by preparing a statement of net income that meets IFRS requirements.

Answer 1

Lawrence Corporation
Statement of Profit and loss
For the year ended December 31
Sales	$130,000
Less: Cost of goods sold	$41,000
Gross Profit		$89,000
Operating expenses:
General and administrative expenses	$21,080
Selling expenses	$17,500	$38,580
Operating Profit		$50,420
Dividend income		$610
Interest Income		$1,400
Gain on disposal of plant assets		$1,400
Loss on Asset impairment		($2,200)
Income before interest and tax		$49,210
Interest expenses		$2,700
Income tax ($46510 x 40%)		$18,604
Net Income		$27,906
Working Note:
General and administrative expenses include all office and general expenses
Office supplies expenses	4100
Accounting and legal fees	780
office salaries expenses	6800
depreciation expense	9400
Selling expenses includes sales salaries, advertising expenses and selling exp.
Dividend paid and unrealized gain on trading investment are reported in balance
sheet not in income statement.