STATEMENT OF COMPREHENSIVE INCOME (MERCHANDISING)

ALLEY’S MERCHANDISING
PARTIAL TRIAL BALANCE
December 31, 2017
Account Debit Credit
Inventory, 01/01/2017 ₱1,500,000
Sales ₱22,000,000
Sales Returns & Allowances 21,000
Sales Discounts 112,000
Purchases 9,000,000
Freight-in 150,000
Freight-Out 220,000
Purchase Discounts 125,000
Purchase Returns & Allowances 13,000
Salaries Expense 1,500,000
Rent Expense 600,000
Utilities Expense 300,000
Permits & Licenses 25,000
Repairs & Maintenance 75,000
Depreciation Expense 150,000
Note: Inventory based on a year-end count of 12/31/2017 - ₱1,450,000
Based on salaries, rent, utilities and depreciation expense =
Selling (25%) & Administrative Functions (75%)

INCOME STATEMENT:

Alley Merchandising
Statement of Comprehensive Income
For the Year Ended December 31, 2017 Compute for the following:
(In Philippine Peso) 1. REVENUES 21,867,000.00
Sales 22,000,000.00 2. NET PURCHASES 9,012,000.00
Less: 3. GROSS PROFIT 13,105,000.00
Sales Discount 112,000.00 3. COST OF SALES 8,762,000.00
Sales Returns & Allowances 21,000.00 133,000.00 4. SELLING EXPENSE 857,500.00
Net Sales 21,867,000.00 5. ADMINISTRATIVE EXPENSE 2,012,500.00
Less: Cost of Sales 6. NET INCOME 10,235,000.00
Merchandise Inventory, Jan. 01, 2015 1,500,000.00
Add: Purchases 9,000,000.00
Add: Freight In 150,000.00
Total Purchase 9,150,000.00
Less: Purchase Discounts 125,000.00
Purchase Returns & Allowances 13,000.00 138,000.00
Net Purchase 9,012,000.00
Total Goods Available for Sale 10,512,000.00
Less: Merchandise Inventory, December 31, 2017 1,750,000.00
Cost of Sales 8,762,000.00
Gross Profit 13,105,000.00
Less: Selling & Administrative Expenses
Selling Expenses:
Freight-Out 220,000.00
Salaries Expense 375,000.00
Rent Expense 150,000.00
Utilities Expense 75,000.00
Depreciation 37,500.00 857,500.00
Administrative Epenses
Salaries Expense 1,125,000.00
Rent Expense 450,000.00
Utilities Expense 225,000.00
Depreciation 112,500.00
Permits & Licenses 25,000.00
Repairs & Maintenance 75,000.00 2,012,500.00 2,870,000.00
Net Income 10,235,000.00

STEP-BY-STEP: STATEMENT OF COMPREHENSIVE INCOME (MERCHANDISING)

1. Determine the Revenues
- Since the entity is a merchandising concern, its revenue will come from sales.
- The revenue to be presented must be net of any deductions.

Sales ₱22,000,000
Less: Sales Returns & Allowances ₱21,000
Sales Discounts 112,000 133,000
Net Sales (note 1) ₱21,867,000
2. Determine the Net Purchases, Cost of Sales and Gross Profit
A. Determine first your Net Purchase to be able to compute our Cost of Sales. Freight-in must be added
to the purchases made as the cost is carried out by buyer.
Purchases ₱9,000,000
Add: Freight-In 150,000
Total Purchases 9,150,000
Less: Purchase Discounts ₱125,000
Purchase Sales Returns & Allowances 13,000 138,000
Net Purchases (note 2) ₱9,012,000

Note: Freight-in denotes charges pertaining to the receipt or purchase of goods. This is therefore
accounted as an addition to purchases.
Freight-out pertains to the delivery of Cost of Goods Sold. It is treated as a selling expense.

B. Now that the Net Purchase has been determined, the Cost of Sales can now be computed.
Inventory, 01/01/2017 ₱1,500,000
Add: Net Purchases 9,012,000
Total Goods Available for Sale 10,512,000
Less: Inventory, 12/31/2017 1,750,000
Cost of Sales (note 3) ₱8,762,000

C. After determining the Cost of Sales, the said amount should now be in place in the partial statement
of comprehensive income’
Net Sales (note 1) ₱21, 867, 000
Less: Cost of Sales (note 3) 8,762,000
Gross Profit (note 4) ₱13,105,000
 Gross Profit is computed as the difference between the net sales and cost of sales. In case the cost of
sales are larger than the net sales, such amount is called gross loss.

3. Determine the Selling Expenses & Administrative Expenses

Compute first for any allocation given for Selling and Administrative Expenses:
Allocation of Expense
Nature Total Selling (25%) Administrative (75%)
Salaries ₱1,500,000 ₱375,000.00 ₱1,125,000.00
Rent 600,000 150,000.00 450,000.00
Utilities 300,000 75,000.00 225,000.00
Depreciation 150,000 37,500.00 112,500.00

Selling Expenses (note 5)

Administrative Expenses (note 6)
Freight-out ₱220,000 Salaries 1,125,000.00
Salaries 375,000.00 Rent 450,000.00
Rent 150,000.00 Utilities 225,000.00
Utilities 75,000.00 Depreciation 112,500.00
Depreciation 37,500.00 Permits & Licenses 25,000.00
Selling Expenses (note 5) ₱857,500 Repairs & Maintenance 75,000.00
Administrative Expenses (note 6) ₱2,012,500
4. Determine the Net Income

After which, the administrative expenses can now be placed in the working statement of comprehensive
income.

Net Sales (note 1) ₱21, 867, 000

Less: Cost of Sales (note 3) 8,762,000
Gross Profit ₱13,105,000
Less: Selling & Administrative Expenses
Selling (note 5) ₱857,500
Administrative (note 6) 2,012,500 2,870,000
NET INCOME ₱10,235,000
 STATEMENT OF COMPREHENSIVE INCOME (SERVICE)

AVC DENTAL CLINIC

PARTIAL TRIAL BALANCE
December 31, 2017
Account Debit Credit
Professional Fees ₱800,000
Representation Expense ₱25,000
Salaries Expense 200,000
Rent Expense 175,000
Office Supplies 100,000
Utilities Expense 90,000
Depreciation Expense 20,000
Miscellaneous Expense 15,000
Gain on Sale of Equipment 50,000
Provision for Income Tax 80,000
Other Comprehensive Income 20,000

AVC DENTAL CLINIC

Statement of Comprehensive Income
For the Year Ended December 31, 2017
(In Philippine Peso)
Professional Fees 8,000,000.00
Less: Operating Expenses
Representation Expenses 25,000.00
Salaries expenses 200,000.00
Rent Expenses 175,000.00
Office Supplies 100,000.00
Utilities Expense 90,000.00
Depreciation Expense 20,000.00
Miscellaneous Expense 15,000.00 625,000.00
Operating Income 7,375,000.00
Add: Gain on Sale of Equipment 50,000.00
Other Comprehensive Income 20,000.00 70,000.00
Income Before Tax 7,445,000.00
Less: Provision for Income Tax 80,000.00
Net Income After Tax 7,365,000.00