Chapter 6

Statement of Comprehensive Income

Problem 6-1

Masay Company provided the following information for 2019:

Sales 7,500,000
Inventories – January 1:
Raw materials 200,000
Goods in process 240,000
Finished goods 360,000
Inventories – December 31:
Raw materials 280,000
Goods in process 170,000
Finished goods 300,000
Purchases 3,000,000
Direct labor 950,000
Indirect labor 250,000
Superintendence 210,000
Light, heat and power 320,000
Rent – factory building 120,000
Repair and maintenance – machinery 50,000
Factory supplies used 110,000
Sales salaries 400,000
Advertising 160,000
Depreciation – store equipment 70,000
Office salaries 150,000
Depreciation – office equipment 40,000
Depreciation – machinery 60,000
Sales returns and allowances 50,000
Interest income 10,000
Gain on sale of equipment 100,000
Delivery expenses 200,000
Accounting and legal fees 150,000
Office expenses 250,000
Earthquake loss 300,000
Gain from expropriation of asset 100,000
Income tax expense 320,000

Required:

a. Prepare a statement of cost of goods manufactured

b. Prepare an income statement using the “cost of goods sold” method with supporting
notes
c. Prepare an income statement using the “nature of expense” method with supporting
notes.

Answer:
a.
Masay Company
Statement of Cost if Goods Manufactured
December 31, 2019

Raw materials – January 1 200,000

Purchases 300,000
Raw materials available for use 3,200,000
Less: Raw materials – December 31 280,000
Raw materials used 2,920,000
Direct labor 950,000
Factory overhead:
Indirect labor 250,000
Superintendence 210,000
Light, heat and power 320,000
Rent – factory building 120,000
Repair and maintenance – machinery 50,000
Factory supplies used 110,000
Depreciation – machinery 60,000 1,120,000
Total manufacturing cost 4,990,000
Goods in process – January 1 240,000
Total Cost of goods in process 5,230,000
Less: Goods in process – December 31 170,000
Cost of goods manufactured 5,060,000
Cost of sales method

Masay Company
Income Statement
December 31, 2019

Note
Net sales revenue (1) 7,450,000
Cos of goods sold (2) (5,120,000)
Gross income 2,330,000
Other income (3) 210,000
Total income 2,540,000
Expenses:
Distribution costs (4) 830,000
Administrative expenses (5) 590,000
Other expense (6) 300,000 1,720,000
Income before tax 820,000
Income tax expense ( 320,000)
Net income 500,000

Note 1 – Net sales revenue

Sales 7,500,000
Sales returns and allowance ( 50,000)
Net sales revenue 7,450,000

Note 2 – Cost of goods sold

Finished goods – January 1 360,000
Cost of goods manufactured 5,060,000
Goods available for sale 5,420,000
Finished goods – December 31 ( 300,000)
Cost of goods sold 5,120,000

Note 3 – other income

Gain from expropriation 100,000
Interest income 10,000
Gain on sale of equipment 100,000
Other income 210,000

Note 4 – Distribution costs

Sales salaries 400,000
Advertising 160,000
Depreciation – store equipment 70,000
Delivery expenses 830,000
Note 5 – Administrative expenses
Office salaries 150,000
Depreciation – office equipment 40,000
Accounting and legal fees 150,000
Office expenses 250,000
Total 590,000

Note 6 – other expense

Earthquake loss 300,000

Nature of expense method

Masay Company
Income Statement
December 31, 2019

Note
Net sales revenue (1) 7,450,000
Other income (2) 210,000
Total income 7,660,000
Expenses:
Decrease in finished goods
and goods in process (3) 130,000
Raw materials used (4) 2,920,000
Direct labor 950,000
Factory overhead (5) 1,120,000
Sales (6) 550,000
Advertising 160,000
Depreciation (7) 110,000
Delivery expenses 200,000
Accounting and legal fees 150,000
Office expenses 250,000
Other expense (8) 300,000 6,840,000
Income before tax 820,000
Income tax expense ( 320,000)
Net income 500,000

Note 1 – Net sales revenue

Sales 7,500,000
Sales returns and allowance ( 50,000)
Net sales revenue 7,450,000

Note 2 – other income

Gain from expropriation 100,000
Interest income 10,000
Gain on sale of equipment 100,000
Other income 210,000

Note 3 – Decrease in finished goods and goods in process

January 1 December 31 Decrease

Finished goods 360,000 300,000 60,000
Goods in process 240,000 170,000 70,000
Total 600,000 470,000 130,000

Note 4 – Raw materials used

Raw materials – January 1 200,000
Purchases 3,000,000
Raw materials available for use 3,200,000
Raw materials – December 31 280,000
Raw materials used 2,920,000

Note 5 – factory overhead

Indirect labor 250,000
Superintendence 210,000
Light, heat and power 320,000
Rent – factory building 120,000
Repair and maintenance – machinery 50,000
Factory supplies used 110,000
Depreciation – machinery 60,000
Total 1,120,000

Note 6 – Salaries
Sales salaries 400,000
Office salaries 150,000
Total 550,000

Note 7 – depreciation
Depreciation – store equipment 70,000
Depreciation – office equipment 40,000
Total 110,000

Note 8 – other expense

Earthquake loss 300,000
Problem 6-2

Endless Company provided the following information for the year ended December 31,
2019:
Contribution 125,000
Delivery expense 425,000
Depreciation – delivery truck 60,000
Depreciation – office 35,000
Depreciation – store equipment 25,000
Dividends paid 450,000
Dividend revenue 50,000
Doubtful accounts 30,000
Income tax 280,000
Freight in 145,000
Gain on sale of equipment 10,000
Interest revenue 20,000
Loss on sale of trading securities 50,000
Loss from inventory writedown 150,000
Merchandise inventory, January 1 1,100,000
Office salaries 950,000
Purchase discounts 45,000
Purchases 4,600,000
Retained earnings, January 1 550,000
Sales 8,750,000
Sales returns and allowances 150,000
Sales salaries 600,000
Store supplies 150,000

Inventory at year-end was valued at P850,000, P1,000,000 cost less the P150,000
writedown of inventory to net realizable value:

Endless Company made a prior period error by understanding depreciation in 2018 by

P200,000

Required:

Prepare and income statement with supporting notes

Answer:

Endless Company
Income Statement
December 31, 2019

Note
Net sales revenue (1) 8,600,000
Cost of goods sold (2) (4,950,000)
Gross income 3,650,000
Other income (3) 80,000
Total income 3,730,000
Expenses:
Distribution costs (4) 1,260,000
Administrative expenses (5) 1,140,000
Other expenses (6) 50,000 2,450,000
Income before tax 1,280,000
Income tax (280,000)
Net income 1,000,000

Note 1 – net sales revenue

Sales 8,750,000
Sales returns and allowances (150,000)
Net sales revenue 8,600,000

Note 2 – cost of goods sold

Merchandise inventory, January 1 1,100,000
Purchases 4,600,000
Freight in 145,000
Purchase discounts ( 45,000) 4,700,000
Goods available for sale 5,800,000
Merchandise inventory, December 31 1,000,000
Cost of goods sold before write down 4,800,000
Loss from inventory writedown 150,000
Cost of goods sold after inventory writedown 4,950,000

Note 3 – other income

Dividend revenue 50,000
Gain on sale of equipment 10,000
Interest revenue 20,000
Total 80,000
Note 4 – distribution costs
Delivery expense 425,000
Depreciation – delivery truck 60,000
Depreciation – store equipment 25,000
Sales salaries 600,000
Store supplies 150,000
Total 1,260,000

Note 5 – administrative expenses

Contribution 125,000
Depreciation – office 35,000
Doubtful accounts 30,000
Office salaries 950,000
Total 1,140,000

Note 6 – other expenses

Loss on sale of trading securities 50,000

Problem 6-3

Berna Company was organized on January 1, 2019, 25,000 ordinary shares of P100
par value being issued in exchange for property, plant and equipment valued at
P3,000,000 and cash of P1,000,000.

The following data summarize activities for the year.

1. Net income for the current year was P1,000,000.

2. Raw materials on hand on December 31 were equal to 25% of raw materials
purchased.
3. Manufacturing costs were distributed as follows:

Material used 50%

Direct labor 30%
Factory overhead 20% (includes depreciation of building,P100,000)

4. Goods in process remaining in the factory on December 31 were equal to 33 1/3% of

the goods finished and transferred to stock.
5. Finished goods remaining in stock were equal to 25% of the cost of goods sold.
6. Expenses were 30% of sales.
7. Cost of goods sold was 150% of the expenses total.
8. Ninety percent of sales were collected. The balance was considered collectible.
9. Seventy five percent of the raw materials purchased were paid for. There were no
expense accruals or prepayments at the end of the year.
Required:

a. Prepare an income statement for the year ended December 31, 2019
b. Prepare a statement of financial position on December 31, 2019

Answer:

Berna Company
Income statement
December 31, 2019

Sales (1,000,000 / 25%) 4,000,000

Cost of goods sold (45% x 4,000,000) (1,800,000)
Gross income 2,200,000
Expenses (30% x 4,000,000) (1,200,000)
Net income 1,000,000

Cost of goods sold (150% x 30%) 45%

Net income (100% - 45% - 30%) 25%

Computation:
Purchases (1,500,000 / 75%) 2,000,000
Raw materials – December 31 500,000
Raw materials used (50% x 3,000,000) 1,500,000
Direct labor (30% x 3,000,000) 900,000
Factory overhead (20% x 3,000,000) 600,000
Total manufacturing costs 3,000,000
Goods in process – December 31 (1/3 x 2,250,000) 750,000
Cost of goods manufactured 2,250,000
Finished goods – December 31 (25% x 1,800,000) 450,000
Cost of goods sold 1,800,000
 Berna Company
Statement of Financial Position
December 31, 2019

ASSETS

Note
Current assets:
Cash 500,000
Accounts receivable (10% x 4,000,000) 400,000
Inventories (1) 1,700,000
Total current assets 2,600,000

Noncurrent assets:
Property, plant and equipment (2) 2,900,000
Total assets 5,500,000

LIABILITIES AND EQUITY

Current liability:
Account payable (25% x 2,000,000) 500,000

Equity:
Common stock, P100 par 2,500,000
Additional paid in capital 1,500,000
Retained earnings 1,000,000
Total equity 5,000,000
Total liabilities and equity 5,500,000

Note 1 – inventories
Raw materials – December 31 500,000
Goods in process – December 31 (1/3 x 2,250,000) 750,000
Finished goods – December 31 (25% x 1,800,000) 450,000
Total 1,700,000

Note 2 – property, plant and equipment

Total cost 3,000,000
Accumulated depreciation (100,000)
Carrying amount 2,900,000
Problem 6-4

Youth Company provided the following data for 2019:

Sales 9,070,000
Purchases 5,750,000
Transportation in 150,000
Inventory beginning 1,500,000
Inventory ending 1,400,000
Uninsured flood loss 340,000
Officers’ salaries 400,000
Depreciation – building 120,000
Office supplies 60,000
Depreciation – store equipment 110,000
Store supplies 80,000
Sales salaries 500,000
Sales returns and allowances 200,000
Purchase discounts 100,000
Income tax expense 360,000

Required:

Prepare an income statement.

Answer:

Youth Company
Income Statement
December 31, 2019

Note
Net sales revenue (1) 8,870,000
Cost of goods sold (2) (5,900,000)
Gross income 2,970,000
Expenses:
Distribution costs (3) 690,000
Administrative expenses (4) 580,000
Other expense (5) 340,000 1,610,000
Income before tax 1,360,000
Income tax expense ( 360,000)
Net income 1,000,000

Note 1 – net sales revenue

Sales 9,070,000
Sales returns and allowances ( 200,000)
Net sales revenue 8,870,000
Note 2 – cost of goods sold
Beginning inventory 1,500,000
Purchases 5,750,000
Transportation in 150,000
Purchase discounts ( 100,000) 5,800,000
Goods available for sale 7,300,000
Ending inventory (1,400,000)
Cost of goods sold 5,900,000

Note 3 – distribution costs

Depreciation – store equipment 110,000
Store supplies 80,000
Sales salaries 500,000
Total 690,000

Note 4 – administrative expenses

Officer’s salaries 400,000
Depreciation – building 120,000
Office supplies 60,000
Total 580,000

Note 5 – other expense

Uninsured flood loss 340,000

Problem 6-5

Rose Company provided the following data for 2019:

Dividend income from investments 9,200,000

Distribution income from trusts 500,000
Interest income on deposits 700,000
Income from bank treasury bills 100,000

Unrealized gain on forward contract designated as

Cash flow hedge 400,000
Income from dealing in securities and derivatives
Held for trading 600,000
Writedown of securities and derivatives held for trading 150,000
Other income 250,000
Finance cost 300,000
Administrative staff costs 3,800,000
Sundry administrative costs 1,200,000
Income tax expense 1,700,000
Required:

Prepare a single statement of comprehensive income.

Answer:

Rose Company
Statement of Comprehensive Income
December 31, 2019

Dividend income from investments 9,200,000

Distribution income from trusts 500,000
Interest income on deposits 700,000
Income from bank treasury bills 100,000
Income from dealing in securities and derivatives held
for trading, net(600,000 – 150,000) 450,000
Other income 250,000
Total income 11,200,000
Expenses:
Administrative staff costs 3,800,000
Sundry administrative costs 1,200,000
Finance cost 300,000 5,300,000
Income before income tax 5,900,000
Income tax expense 1,700,000
Net income 4,200,000
Other comprehensive income to be reclassified to
profit or loss:
Unrealized gain on forward contract designated as
cash flow hedge 400,000
Comprehensive income 4,600,000

Problem 6-6

The adjusted trial balance of Dahlia Company included the following accounts on
December 31, 2019:

Sales 9,500,000
Interest revenue 250,000
Gain sale of equipment 100,000
Revaluation surplus during the year 1,200,000
Share of profit of associate 350,000
Cost of goods sold 6,000,000
Finance cost 150,000
Distribution costs 500,000
Administrative expenses 300,000
Translation loss on foreign operation 200,000
Income tax expense 950,000

Required:

Prepare a single statement of comprehensive income for the year ended December 31,
2019.

Answer:

Dahlia Company
Statement of Comprehensive Income
December 31, 2019

Sales 9,500,000
Cost of goods sold 6,000,000
Gross income 3,500,000
Other income 350,000
Share of profit of associate 350,000
Total income 4,200,000
Expenses:
Distribution costs 500,000
Administrative expenses 300,000
Finance costs 150,000 950,000
Income before income tax 3,250,000
Income tax expense 950,000
Net income 2,300,000
Other comprehensive income to be reclassified
to profit or loss:
Translation loss ( 200,000)
Other comprehensive income not to be reclassified
to profit or loss:
Revaluation surplus 1,200,000
Comprehensive income 3,300,000
Problem 6-7

The adjusted trial balance of Lotus Company included the following accounts on
December 31, 2019:

Sales 9,750,000
Share of profit of associate 150,000
Other income 300,000
Decrease in inventory of finished goods 250,000
Raw materials and consumable used 3,500,000
Employee benefit expense 1,500,000
Translation gain on foreign operation 300,000
Depreciation 450,000
Impairment loss on property 800,000
Finance cost 350,000
Other expenses 450,000
Income tax expense 900,000
Unrealized gain on option contract designated as cash
Flow hedge 200,000

Required:

Prepare a single statement of comprehensive income for the year ended December 31,
2019.

Answer:

Lotus Company
Statement of Comprehensive Income
December 31, 2019

Sales 9,750,000
Cost of sales (250,000+3,500,000) 3,750,000
Gross income 6,000,000
Other income 300,000
Share of profit of associate 150,000
Total income 6,450,000
Expenses:
Employee benefit expense 1,500,000
Depreciation 450,000
Finance costs 350,000
Other expenses 450,000
Impairment loss 800,000 3,550,000
Income before income tax 2,900,000
Income tax expense 900,000
Net income 2,000,000
Other comprehensive income to be reclassified
To profit or loss:
Translation gain 300,000
Unrealized gain on option 200,000 500,000
Comprehensive income 2,500,000

Problem 9-8

Parker Company reported operating expenses as distribution and general or

administrative.

The adjusted trial balance at the end of the current year included the following expense
accounts:

Accounting and legal fees 1,450,000

Advertising 1,500,000
Freight out 750,000
Interest 600,000
Loss on sale of long-term investment 300,000
Officers’ salaries 2,250,000
Property taxes and insurance 300,000
Rent for office space 1,800,000
Sales salaries and commissions 1,400,000

One-half of the rented premises is occupied by the sales department.

What total amount should be included in distribution expenses for the current year?

a. 6,000,000
b. 3,650,000
c. 4,550,000
d. 4,900,000

Advertising 1,500,000
Freight out 750,000
Rent for office space (1,800,000 x ½) 900,000
Sales salaries and commissions 1,400,000
Total distribution costs 4,550,000
Problem 6-9

Grim Company incurred the following costs during the current year:

Property taxes 250,000

Freight in 1,750,000
Doubtful accounts 1,600,000
Officers’ salaries 1,500,000
Insurance 850,000
Sales representative salaries 2,150,000
Interest on inventory loan 500,000
Research and development expense 1,000,000

What amount of these costs should be reported as administrative expenses?

a. 2,600,000
b. 3,350,000
c. 5,200,000
d. 4,200,000

Property taxes 250,000

Doubtful accounts 1,600,000
Officers’ salaries 1,500,000
Insurance 850,000
Total administrative expenses 4,200,000

Problem 6-10

Condo Company reported the following total debits and total credits in selected
accounts after closing entries were posted:

Debits Credits
Materials 600,000 200,000
Goods in process 500,000 300,000
Material purchases 2,500,000 2,500,000
Purchase discount 100,000 100,000
Transportation in 200,000 200,000
Direct labor 3,000,000 3,000,000
Manufacturing overhead 1,500,000 1,500,000
Finished goods 700,000 400,000
1. What is the cost of raw materials used?

a. 2,800,000
b. 2,400,000
c. 3,200,000
d. 2,600,000

2. What is the cost of goods manufactured?

a. 6,900,000
b. 7,200,000
c. 7,000,000
d. 7,400,000

3. What is the cost of goods sold of the year?

a. 6,900,000
b. 7,400,000
c. 7,100,000
d. 7,000,000

Answer:

Beginning material 200,000

Purchases 2,500,000
Purchase discounts ( 100,000)
Transportation in 200,000
Raw materials available for use 2,800,000
Ending materials (600,000 – 200,000) ( 400,000)
Raw materials used 2,400,000
Direct labor 3,000,000
Manufacturing overhead 1,500,000
Total manufacturing cost 6,900,000
Beginning goods in process 300,000
Total cost of goods in process 7,200,000
Ending goods in process (500,000 – 300,000) ( 200,000)
Cost of goods manufactured 7,000,000
Beginning finished goods 400,000
Goods available for sale 7,400,000
Ending finished goods (700,000 – 400,000) ( 300,000)
Cost of goods sold 7,100,000
Problem 6-11

Melissa Company provided the following information for the current year:

Beginning inventory 400,000

Freight in 300,000
Purchase returns 900,000
Ending inventory 500,000
Distribution costs 1,250,000
Sales discount 250,000

The cost of goods sold is six times the distribution costs.

What is the amount of gross purchases?

a. 6,500,000
b. 6,700,000
c. 8,000,000
d. 8,200,000

Beginning inventory 400,000

Gross purchases (squeeze) 8,200,000
Freight in 300,000
Purchase returns (900,000)
Goods available for sale 8,000,000
Ending inventory (500,000)
Cost of goods sold (1,250,000 x 6) 750,000

Problem 6-12

Gianina Company reported the following information for the current year:

Inventory, January 1 2,000,000

Purchases 7,500,000
Purchase returns and allowances 500,000
Sales returns and allowances 750,000
Inventory at December 31 2,800,000
Gross profit rate on net sales 20%

What is the amount of gross sales for the current year?

a. 7,750,000
b. 8,500,000
c. 7,000,000
d. 9,125,000

Answer:

Inventory – January 1 2,000,000

Purchases 7,500,000
Purchase returns and allowance ( 500,000)
Goods available for sale 9,000,000
Inventory – December 31 (2,800,000)
Cost of goods sold 6,200,000

Net sales (6,200,000 / 80%) 7,750,000

Sales returns and allowances 750,000
Gross sales 8,500,000

Problem 6-13

Thorpe Company reported net income of P7,410,000 for the current year.

The auditor raised questions about the following amounts that had been included in net
income:

Unrealized loss on financial asset at fair value

Through other comprehensive income (540,000)
Gain on early retirement of bonds payable 2,200,000
Adjustment of profit of prior year for error
In depreciation, net of tax effect (750,000)
Loss from fire (1,400,000)
Gain from change in fair value attributable to
Credit risk of financial liability designated
At FVPL 500,000

What is the adjusted net income for the current year?

a. 6,500,000
b. 7,200,000
c. 8,200,000
d. 8,700,000
 Answer:

Net income per book 7,410,000

Add: Unrealized loss 540,000
Adjustment of profit of prior year 750,000 1,290,000
Adjusted net income 8,700,000

The unrealized loss on financial assets is a component of other comprehensive income.

The adjustment of profit of prior year is shown in the statement of retained earnings.

Problem 6-14
Pearl Company reported income before tax of P5,000,000 for the current year. The
entity owned 40% of Cinn’s share capital.

The auditor questioned the following amounts that had been included in income before
tax:

Equity in earnings of Cinn Company 1,600,000

Dividend received from Cinn Company 320,000
Adjustment of profit of prior year
For arithmetical error in depreciation (1,400,000)

What amount should be reported as income before tax for the current year?

a. 3,400,000
b. 4,680,000
c. 4,800,000
d. 6,080,000

Answer:

Reported income before tax 5,000,000

Add: Adjustment of profit of prior year 1,400,000
Total 6,400,000
Less: Dividend received from Cinn (320,000)
Income before tax 6,080,000
Problem 6-15

Divina Company provided the following information for the current year:

Income from continuing operations 4,000,000

Income from discontinued operation 500,000
Unrealized gain on financial asset – FVPL 800,000
Unrealized loss on equity investment – FVOCI 1,000,000
Unrealized gain on debt investment – FVOCI 1,200,000
Unrealized gain on futures contract designated
As a cash flow hedge 400,000
Translation loss on foreign operation 200,000
Net remeasurement gain on defined benefit plan 600,000
Loss on credit risk of a financial liability at FVPL 300,000
Revaluation surplus during the year 2,500,000

1. What amount should be reported as net income for the current year?

a. 4,000,000
b. 4,500,000
c. 5,300,000
d. 4,800,000

2. What net amount should be reported as OCI for the current year?

a. 4,000,000
b. 3,500,000
c. 3,200,000
d. 700,000

3. 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
Problem 6-16

1. The term comprehensive income

a. Must be reported on the face of the income statement.

b. Includes all changes in equity except those resulting from investments by
and distributions to owners.
c. Is the net change in owners’ equity for the period.
d. Is synonymous with the term net income.

2. All of the following components of other comprehensive income are reclassified to

profit or loss, except.

a. Gain from translating the financial statements of a foreign operation

b. Loss from remeasuring debt investment at FVOCI
c. The effective portion of gain or loss on hedging instrument in a cash flow hedge
d. Gain on remeasuring equity investment at FVOCI

3. Which components of other comprehensive income should be reclassified to

retained earnings?

a. Revaluation surplus
b. Remeasurement of defined benefit plan
c. Change in fair value attributable to credit risk of financial liability designated at
FVPL
d. All of these components of OCI should be reclassified to retained earnings

4. Why is reclassification adjustment used when reporting other comprehensive

income?

a. To reclassify an item of comprehensive income as another item of

comprehensive income
b. To avoid double counting of items
c. To make net income equal comprehensive income
d. To adjust the income tax effect of OCI

5. The components of OCI include all, except

a. Unrealized gain on derivative contract designated as cash flow hedge

b. Loss from translating the financial statements of a foreign operation
c. Actuarial gain on defined benefit plan
d. Dividend paid to shareholders
6. Which is not a component of OCI?

a. Foreign currency translation adjustment

b. Unrealized gain on financial asset held for trading
c. Deferred loss on derivative financial instrument designated as cash flow hedge
d. Change in revaluation surplus

7. Which is not a component of OCI?

a. Remeasurement of defined benefit plan

b. Treasury share at cost
c. Foreign currency translation adjustment
d. Unrealized gain on equity investment measured at FVOCI

8. Which of the following options for displaying other comprehensive income is

preferred?

a. A continuation from net income in the income statement

b. A separate statement that begins with net income
c. In the statement of changes in equity
d. A continuation from net income in the income statement or a separate
statement that begins with net income

9. How should exchange gain or loss resulting from foreign currency transaction be
accounted for?

a. Included as component of income from continuing operations for the

period in which the rate changes
b. Included as component of other comprehensive income for the period in which
the rate changes
c. Included in the statement of financial position
d. Included in net income for gain but deferred for loss

10. Unusual and infrequent gain should be presented as

a. Component of income from continuing operations, but not net of applicable

income tax
b. Component of income from continuing operations, net of applicable income tax
c. Extraordinary item
d. Prior period error, net of applicable income tax