Question

Bramble a clothing retailer, had income from operations (before tax) of $465,000, and recorded the following before-tax gains/(losses) for the year ended December 31, 2020:

Gain on disposal of equipment		33,480
Unrealized (loss)/gain on FV-NI investments		(66,960	)
(Loss)/gain on disposal of building		(84,320	)
Gain on disposal of FV-NI investments		40,920

Bramble also had the following account balances as at January 1, 2020:

Retained earnings		$508,400
Accumulated other comprehensive income (this was due to a revaluation surplus on land)		125,840
Accumulated other comprehensive income (this was due to gains on FV-OCI investments)		68,200

As at January 1, 2020, Bramble had one piece of land that had an original cost of $142,000 that it accounted for using the revaluation model. It was most recently revalued to fair value on December 31, 2019, when its carrying amount was adjusted to fair value of $267,840. In January 2020, the piece of land was sold for proceeds of $267,840. In applying the revaluation model, Bramble maintains the balance in the Revaluation Surplus (OCI) account until the asset is retired or disposed of.

In 2015, Bramble purchased a portfolio of debt investments that the company intended to hold for longer term and classified the portfolio of investments as fair value through other comprehensive income (FV-OCI) with gains/losses recycled through net income. The investments in the portfolio are traded in an active market. Bramble records unrealized gains and losses on these investments as OCI, and then books these gains and losses to net income when they are impaired or sold. The portfolio’s carrying amount on December 31, 2019, was $136,400. The entire portfolio was sold in November 2020 for proceeds of $156,240.

Bramble’s income tax expense for 2020 was $122,760. Bramble prepares financial statements in accordance with IFRS.

Calculate net income for the year ended December 31, 2020. Bramble Corporation Partial Statement of Income For the year Ended December 31, 2020 Income from Operations $ 465000 Other Revenues and Gains Gain on disposal of Equipment $ 33480 Cain on disposal of FV-NI Investments 40.920 Gain on disposal of FV-OCI Investments 267,840 Other Expenses and Losses Loss on Disposal of Building (84,320) Unrealized Loss on FV-NI Investments 66960 151280 Income before Income Tax Income Tax Expense 122.760 Net Income /(Loss) $

Answer 1

Bramble Corporation
Partial Statement of Income
For the year Ended December 31, 2020
Income from operations		465000
Other Revenues and Gains
Gain on disposal of equipment	33480
Gain on disposal of FV-NI Investments	40920
Gain on disposal of FV-OCI Investments	88040
		162440
		627440
Other Expenses and Losses
Loss on disposal of building	-84320
Unrealized loss on FV-NI Investments	66960
		-151280
Income before income tax		476160
Income tax expense		122760
Net income/(loss)		353400