Statement of Comprehensive Income

Expenses Divided Into Different Nature

Numbers 1, 2, 3 and 4
Spades Company provided the following information for the year ended December 31, 2022:

Sales 8,000,000
Sales salaries 520,000
Advertising 120,000
Indirect labor 600,000
Delivery expense 160,000
Freight in 80,000
Depreciation – machinery 50,000
Factory taxes 130,000
Purchases 1,600,000
Direct labor 1,480,000
Factory supplies expense 120,000
Office supplies expense 30,000
Office salaries 800,000
Factory superintendence 480,000
Doubtful accounts 100,000
Factory maintenance 150,000
Factory heat, light and power 220,000
Income tax expense 170,000

Inventory balances at the end of the fiscal period as compared with balances at the beginning of the fiscal period were as follows:

Finished goods 200,000 decrease

Goods in process 90,000 decrease
Raw materials 100,000 increase

1) What is the amount of cost of goods sold for the current period?
A. 4,800,000
B. 4,720,000
C. 5,020,000
D. 5,100,000

2) What is the amount of general and administrative expense for the current period?
A. 930,000
B. 800,000
C. 880,000
D. 830,000

3) What is the amount of selling and distribution expense for the current period?
A. 900,000
B. 880,000
C. 960,000
D. 800,000

4) What is the amount of net profit for the current period?

A. 1,170,000
B. 1,380,000
C. 1,300,000
D. 1,000,000

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Nature of Expenses – Selling Expense
5) Brock Corporation reports operating expenses in two categories: (1) selling and (2) general and administrative. The adjusted
trial balance at December 31, 2021, included the following expense and loss accounts:
Accounting and legal fees 120,000
Advertising 150,000
Freight out 80,000
Interest 70,000
Loss on sale of long term investment 30,000
Officers’ salaries 225,000
Rent for office space 220,000
Sales salaries and commissions 140,000
One-half of the rented premises is occupied by the sales department. Brock’s total selling expenses for 2021 are
A. 480,000
B. 400,000
C. 370,000
D. 360,000

Nature of Expenses – General & Administrative Expense

6) The following costs were incurred by Griff Co., a manufacturer, during 2021:
Accounting and legal fees 25,000
Freight in 175,000
Freight out 160,000
Officers’ salaries 150,000
Insurance 85,000
Sales salaries and commissions 215,000
What amount of these costs should be reported as general and administrative expense for 2021?
A. 260,000
B. 550,000
C. 635,000
D. 810,000

Discontinued Operation – Discontinued At The Beginning

7) Trunks Company decided to discontinue its Electronics Division, a separately identifiable component of business. On
December 31, 2023, the division has not been completely sold. However, negotiations for the final and complete sale are
progressing in a year. Analysis of the records for the year disclosed the following relative to the Electronics Division:
Operating loss for the year 8,000,000
Loss on disposal of some Electronics Division assets during 2023 500,000
Expected operating loss in 2024 preceding final disposal 1,000,000
Expected gain in 2024 on disposal of division 2,000,000
What amount should be reported as pretax loss from discontinued operation in 2023?
A. 9,500,000
B. 8,500,000
C. 8,000,000
D. 7,500,000

Discontinued Operation – Discontinued During The Year

8) On May 1, 2022 Topak Company approved a plan to disclose of a business segment. It is expected that the sale will occur on
March 1, 2023. On December 31, 2022, the carrying amount of the net assets of the segment was P2,000,000 and the fair value
was P1,800,000. During 2022, the company paid employee severance and relocation costs of P100,000 as a direct result of
discontinued operation. Income tax rate is 30%. The revenues and expenses of the discontinued segment during 2022 were:
Revenue Expenses
January 1 to April 30 1,500,000 2,000,000
May 1 to December 31 700,000 900,000

How much will be reported as discontinued operation for the year 2022?
A. 700,000
B. 560,000
C. 350,000
D. 210,000
Components of Other Comprehensive Income (OCI)
Numbers 09 and 10
Sham God Company provided the following information for the current year:

Income from continuing operation 4,000,000

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 Income from discontinued operation 500,000
Unrealized gain on financial asset – FVPL 800,000
Unrealized loss on equity investment – FVOCI 1,000,000
Investment gain on debt investment – FVOCI 1,200,000
Unrealized gain on future contract designated as a cashflow hedge 400,000
Translation loss on foreign operation 200,000
Net “remeasurement” gain on defined benefit plan during the year 600,000
Loss on credit risk of financial liability at FVPL 300,000
Revaluation surplus 2,500,000
9) What net amount should be reported as other comprehensive income for the current year?
A.4,000,000
B. 3,500,000
C.3,200,000
D.7,000,000
10) What amount should be reported as comprehensive income for the current year?
A.5,200,000
B. 7,700,000
C.8,500,000
D.7,200,000
OCI Recycle to Profit or Loss VS. OCI Direct to Retained Earnings
Sher Company reported the following in the statement of comprehensive income for 2020:
Unrealized gain on trading securities 1,750,000
Unrealized loss on futures contract designated as cash flow hedge 560,000
Revaluation surplus in 2020 2,500,000
Actuarial gain on projected benefit obligation 1,680,000
Exchange differences in translating foreign operations – credit 750,000
Unrealized gain on equity investment at FVOCI 1,000,000
Unrealized gain on debt investment at FVOCI 1,500,000
11) What net amount may be subsequently recognize in profit or loss?
A. 3,440,000
B. 3,370,000
C. 2,690,000
D. 1,690,000
12) What net amount will not subsequently recognize in profit or loss?
A.5,680,000
B. 5,180,000
C.5,740,000
D.5,930,000
Comprehensive Income
13) Blame Company provided the following information for the current year:
Net income 6,000,000
Unrealized loss on FVTOCI investments 500,000
Translation reserve – credit 600,000
Revaluation reserve 2,000,000
Accumulated profits adjustment – debit 100,000
Appropriated reserve 200,000
Gain on sale of treasury shares 150,000
What amount of comprehensive income should be reported for the current year?
A. 8,200,000
B. 8,300,000
C. 8,100,000
D. 6,000,000
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