Republic of the Philippines

POLYTECHNIC UNIVERSITY OF THE PHILIPPINES

Santa maria bulacan campus
Santa Maria, Bulacan

Name: Cruz, Aiyana Gabrielle M.

Section: BSA 2-1
Date and Time of Submission: December 3, 2021 (12:00 PM)

CONCEPTUAL FRAMEWORKS AND ACCOUNTING STANDARDS

ANSWERS TO LESSON MODULES
04 LESSON: PAS 1 PRESENTATION OF FINANCIAL STATEMENTS (PART 2)

RESEARCH ANALYSIS
Discussion Questions: Write your answer in a yellow sheet paper
1. What is the purpose of the notes to financial statements?
The supplemental notes to a company's published financial statements are known as
financial statement notes. The primary objective of the notes to financial statements is
to clarify accounting techniques utilized by a company and to provide information that
occurred during and soon after the accounting period ended.

2. What are the components of comprehensive income?

Total comprehensive income comprises all components of Profit or loss; and Other
comprehensive income.

3. What are the two forms of presenting the income statements?

The income statement comes in two forms, multi-step and single-step. A multi-step
income statement is an income statement that segregates total revenue and expenses
into operating and non-operating heads. It lists items in different categories to make it
convenient for users of the income statement to better understand the core operations
of the business. On the other hand, a single-step income statement offers a simplified
snapshot of a company's revenue and expenses. This straightforward document merely
conveys a company's revenue, expenses, and bottom-line net income.

4. What are the components of the statement of changes in equity?

The statement of changes in equity records many components over a period, including:

 Total income including profit or loss: Taking all the profits and subtracting all the losses

 The effect of changes in accounting policies (the effect of retrospective, or past,

changes): Say a company decided to change its inventory costing system from last-in-
first-out (LIFO) to first-in-first-out (FIFO). Since the change affects past income, the
company must address the change retrospectively and disclose its impact on the
statement of changes in equity.

 The correction of any errors: A potential investor would need this information to make
an informed decision.

 Additional money invested by owners: The company would disclose the details of these
transactions in the statement of changes in equity as well.

 Dividends: The statement of changes would also include the dividends, or company
earnings distributed to shareholders, which decreases the retained earnings balance.

ASSIGNMENT.

Research one (1) Audited Financial Statements of the following companies and analyze what
items in the Statement of Comprehensive Income made them profitable.

1. San Miguel Corporation

Their 2017 Statement of Comprehensive Income shows that they gained profit on
exchange differences on translation of foreign operations.
https://www.sanmiguel.com.ph/storage/files/reports/SMC_Consolidated_AFS_3years.p
df

2. Top Frontier Investment Holdings

Their Statement of Comprehensive Income for 2010-2013 shows that Dividend Income
made them profitable.
http://www.topfrontier.com.ph/pdf/Consolidated%20Financial%20Statements.pdf

3. Petron Corporation
Petron Corporation’s Statement of Comprehensive Income for 2013 shows that their
sale of Petroleum made them profitable most.
https://www.petron.com/wp-content/uploads/2018/09/Petron_-
_Annual_Report_2015_as_filed_with_SEC_on_April_13_2016_-Part_2_of_3.pdf
4. SM Investments Corporation
 SM Investments Corporation shows that their sales in 2019 made them profitable most
but their sales growth for 2018 shows the highest rate.
https://www.wsj.com/market-data/quotes/PH/SM/financials/annual/income-statement

5. Ayala Corporation
Ayala Corporation shows that their Sale of Goods made them profitable for the year
ended 2016.
https://www.coursehero.com/file/32764225/IS-ohxlsx/

FORMATIVE ASSESSMENT

1. C
2. B
3. A
4. B
5. C
6. C
7. D
8. B
9. B
10. B

LEARNING ASSESSMENT

1. A
2. C
3. D
4. B
5. D
6. C
7. D
8. C
9. A
10. C