STATEMENT OF COMPREHENSIVE INCOME

(Income Statement)
I. Theories
1) What are the elements related to the measurement of financial performance?
A. Asset, Liabilities and Equity
B. Income and Expense
C. Revenues and Losses
D. Asset, Liabilities and Equity, Income Expense

2) The important data affecting the retained earnings are the following except
A. Profit or loss for the period
B. Comprehensive income for the period
C. Prior period errors
D. Effect of changes in accounting policy
3) The errors from the previous year will be included in the _______ of the next year.
A. Other comprehensive income
B. Net income
C. Prior period adjustments
D. Retained earnings

4) Administrative costs include

A. Selling and Administrative Expense
B. Selling, Advertising and Delivery of Goods to Customer CFAS 2019npage 183
C. Selling and other expenses
D. Selling expense only

5) These are amounts reclassified to profit or loss in the current period that were recognized in
other comprehensive income in the current or previous period.
A. Prior period errors
B. Reclassification adjustments
C. Unusual and irregular items
D. Correcting entries

Answer Key
1) B. Income and Expense
2) B. Comprehensive income for the period
3) D. Retained earnings
4) B. Selling, Advertising and Delivery of Goods to Customers
5) B. Reclassification adjustments

LADRINGAN, Justine Jane R.

BSA 2-1
PUP Taguig
 STATEMENT OF COMPREHENSIVE INCOME
(Income Statement)
I. Problems
1) CMB Industries provided the following balances on December 31, 2019
Accounts payable Php 1,400,000
Accrued taxes 55,000
Ordinary share capital 7,700,000
Dividends – ordinary share 4,400,000
Dividends – preference share 1,600,000
Mortgage payable (Php 500,000 due in 6 months) 6,000,000
Notes payable, due on January 14, 2021 2,300,000
Preference share capital 3,250,000
Premium on notes payable 125,000
Income summary – credit balance 9,090,000
Retained earnings – January 1 8,080,000
Unamortized issue cost on note payable 65,000
Unearned rent income 35,000
What is the amount of retained earnings for the year ended?
A. Php 2,080,000
B. Php 11,170,000
C. Php 17,170,000
D. Php 22,120,000
Answer: B.
Retained earnings – January 1 Php 8,080,000
Income summary – credit balance 9,090,000
Dividends – ordinary share (4,400,000)
Dividends – preference share (1,600,000)
Retained earnings, December 31,2019 Php 11,170,000
The net income is derived from the credit balance of the income summary.

2) LMR Enterprises provided the following data for the current year:
Net income Php 2,014,000
Unrealized gain on derivative contract 507,000
Foreign currency translation adjustment – debit 51,500
Revaluation surplus 201,400
What is the comprehensive income for the current year?
A. Php 2,721,900
B. Php 2,670,900
C. Php 2,469,500
D. Php 2,521,000
Answer: B
Net income Php 2,014,000
Other comprehensive income:
Unrealized gain on derivative contract Php 507,000
Foreign currency translation loss (51,500)
Revaluation surplus 201,400 656,900
LADRINGAN, Justine Jane R.
BSA 2-1
PUP Taguig
 Comprehensive income Php 2,670,900
Debit balance recorded for the foreign currency translation adjustment is treated as a
loss and therefor a subtraction to the net income when computing for comprehensive
income.

3) Promise Conglomerates incurred the following during the current year:

 Php 846,895 from condemnation of asset

 Php 689,870 from employee’s major strikes
 Php 318,545 from abandonment of equipment used in business
In the income statement, what is the total amount of infrequent losses that should be
reported as ordinary?
A. Php 0
B. Php 1,165,440
C. Php 1,536,765
D. Php 1,855,310
Answer: A.
Under PAS 1, paragraph 87, mandates that an entity shall not present any item of
income and expense as ordinary.

4) EXODUS Trading accounts for noncurrent assets using cost model. On September 30,
2019, the entity classified a noncurrent asset as held for sale. At the date, the asset’s
carrying amount was Php 1,457,965, its fair value was estimated at Php 957,365, and the
cost of disposal at Php 68,500. On November 20, 2019, the asset was sold for net proceeds
of Php 875,000. What amount should be included as loss on disposal in the statement of
comprehensive income for the year ended, December 31, 2019?
A. Php 13,865
B. Php 82,365
C. Php 514,465
D. Php 582,965
Answer: A.
Carrying amount Php 1,457,965
Fair value less cost of disposal
(Php 957,365 – Php 68,500 ) (888,865)
Impairment Loss Php 569,100

Sale price Php 875,000

Carrying amount on date of sale, November 26, 2019 (888,865)
Loss on disposal (13,865)

5) EXO Entertainment has two divisions, EXO-K and EXO-M, and both qualifies as business
component. In 2019, the entity decided to dispose of the assets and liabilities of Division
EXO-M and it’s probable that the disposal will be complete next year. The revenue and
expenses of EXO Entertainment for 2018 and 2019 are as follows:
2018 2019
EXO-K
Sales Php 4,600,000 Php 5,000,000
Total nontax expenses 4,100,000 4,400,000
LADRINGAN, Justine Jane R.
BSA 2-1
PUP Taguig
EXO-M
Sales 5,100,000 3,500,000
Total nontax expenses 4,500,000 3,900,000
During the latter part of 2019, EXO disposed of a portion of Division M and recognized a
pretax loss of Php 2, 00,000 on disposal. The income tax rate is 30%. What amount should
be reported as a loss from discontinued operations in 2019?
A. Php 1,400,000
B. Php 1,680,000
C. Php 2,000,000
D. Php 2,400,000
Answer: B.
Sales, EXO-M Php 3,500,000
Total nontax expenses, EXO-M 3,900,000
Operating loss (Php 400,000)
Loss on disposal (2,000,000)
Total loss (Php 2,400,000)
Tax saving (Php 2,400,000 x 30%) 720,000
Loss from discontinued operations (Php 1,680,000)

LADRINGAN, Justine Jane R.

BSA 2-1
PUP Taguig