Activity 01 PDF

Intermediate Accounting III
ACTIVITY – STATEMENT OF COMPREHENSIVE INCOME
Name: ___________________________________________ Date: ___________

(Surname) (First Name) (M.I.)
Score: /
Section: ___________________________________________
Instructions: Read each question carefully. Choose the BEST answer for each of the following items/Compute for
the correct answers. Write your answers on the answer sheet provided. Show your solutions.
1) DG Company provided the following information for the current year:
Sales 9,500,000
Interest revenue 250,000
Gain on sale of equipment 100,000
Revaluation surplus during the year 1,200,000
Share of profit of associate 350,000
Net purchases 6,600,000
Increase in inventory 600,000
Finance cost 150,000
Distribution cost 500,000
Administrative cost 300,000
Translation loss on foreign operation 200,000
Income tax expense 950,000
What is the net income for the current year? .
2) The following information for the current year is provided by Shazam Company:
Sales 6,000,000
Cost of goods sold 4,500,000
Unrealized gain on equity investment at FVOCI 450,000
Remeasurement loss on defined benefit plan 600,000
Administrative cost 250,000
Impairment loss on debt investment at amortized cost 300,000
Pretax gain on disposal of a major business division 400,000
Income tax rate 30%
What amount is presented as income from continuing operations? .
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Use the following information for the next two (2) questions:
Vane Co’s trial balance of income statement accounts for the year ending December 31, 2021, included the
following:
Debit Credit
Sales 575,000
Costs of sales 240,000
Administrative expenses 70,000
Loss on sale of equipment 10,000
Sales commissions 50,000
Freight out 15,000
Loss on early retirement of long-term debt 20,000
Uncollectible accounts expense 15,000 ---
Total 420,000 600,000
Other information:
Inventory, January 1, 2021 400,000
Inventory, December 31, 2021 360,000
Vane’s income tax rate is 30%. In Vane’s 2021 multiple step income statement.
3) What amount should Vane report as the cost of goods manufactured? .
4) What amount should Vane report as income after income taxes from continuing operations? .
5) Gary Company had net income of P700,000 for the year ended December 31, 2020 after giving effect to
the following events which occurred during the year:
• The decision was made January 2 to discontinue the travel agency segment.
• The travel agency segment was sold June 30.
• Operating loss from January 1, to June 30 for the travel agency segment amounted to P60,000 before
tax benefit.
• Travel agency assets with a book value of P350,000 were sold for P200,000
Gary’s tax rate was 40% for 2020. For the year ended December 31, 2020, Gary’s after-tax income from
continuing operations was .
6) Jeraziah Company provided the following information for the current year:
Increase in raw materials inventory 200,000

Decrease in goods in process inventory 400,000
Increase in finished goods inventory 500,000
Raw materials used 4,400,000
Direct labor payroll 2,000,000
Factory overhead 3,000,000
Freight-out 600,000
Freight-in 300,000
What is the cost of goods sold for the current year? .

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Use the following information for the next two (2) questions:
Barbet Company provided the following:
Administrative expenses 400,000
Cost of sales 1,800,000
Gain – exchange differences in translating foreign operations 100,000
Finance cost 300,000
Gain – cash flow hedge 50,000
Gains on property revaluations 250,000
Loss for the year from discontinued operations 90,000
Other expenses 110,000
Other income 160,000
Loss – remeasurements on defined benefit plan 270,000
Sales 3,200,000
Share of gain on property revaluation of associates 120,000
Share of profit of associate 80,000
Loss – FVOCI financial assets 70,000
7) The amount reported in the Profit or Loss section for 2021 is .
8) The amount reported in the Other Comprehensive Income section for 2021 is .
9) The following information was taken from Dream Company’s accounting records:
Sales 10,000,000
Decrease in goods in process inventory 200,000
Decrease in raw materials inventory 350,000
Increase in finished goods inventory 500,000
Raw materials purchased 2,100,000
Direct labor payroll 1,000,000
Factory overhead 800,000
Selling expenses 300,000
Freight out 900,000
General and administrative expenses 1,600,000
Dream Company’s profit before tax is .
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10) Hammerstorm Company reported the following data for the current year:
Sales revenue 950,000
Gain on sale of equipment 10,000
Valuation gain on FVOCI investment 20,000
Share in profit of associate 35,000
Cost of goods sold 600,000
Finance cost 15,000
Administrative costs 30,000
Exchange difference on translation of foreign operation – credit 15,000
Income tax expense 75,000
What is the profit for the year? .
Use the following information for the next three (3) questions:
Jaybo Co. incurred the following expenses below:
Interest expense 12,000
Cost of inventories sold 300,000
Insurance expense 50,000
Advertising expense 10,000
Freight out 5,000
Freight in 2,000
Legal and other professional fees 6,000
Rent expense (one half occupied by sales department) 4,000
Sales commission expense 7,000
Doubtful accounts expense 8,000
11) What total amount of expense classified as distribution costs or selling expenses? .
12) What total amount of expense classified as administrative expenses? .
13) Assuming Jaybo earned sales revenue amounting to P500 during the current year, what is the net income? .
14) Alucard Company has two divisions, AAA and BBB. Both qualify as business components. In 2023, the firm
decided to dispose of the assets and liabilities of division BBB and it is probable that the disposal will be
completed early 2024. The revenue and expenses of Alucard Company for 2023 and 2022 are as follows:
2023 2022
Sales-AAA 5,000,000 4,600,000
Total nontax expenses-AAA 4,400,000 4,100,000
Sales-BBB 3,500,000 5,100,000
Total nontax expenses-BBB 3,900,000 4,500,000
During the later part of 2023, Alucard disposed of a portion of division BBB and recognized a pretax loss of
P2,000,000 on the disposal. The income tax rate is 30%.
What amount of loss form discontinued operations should Alucard report in 2023? .
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15) Marjorie Company’s trial balance of income statement accounts for the year ended December 31, 2020
included the following:
Debit Credit
Sales 1,500,000
Cost of sales 600,000
Administrative expense 150,000
Sales salaries and commissions 100,000
Freight out 30,000
Loss on retirement of bonds 100,000
Bad debt expense 30,000 --
1,100,000 1,550,000
Decrease in finished goods inventory during the year is P100,000, while the tax rate is 30%.
What was Marjorie Company’s profit for the year 2020? .
- End J -
Answers:
1. 11. 21.
2. 12. 22.
3. 13. 23.
4. 14. 24.
5. 15. 25.
6. 16. 26.
7. 17. 27.
8. 18. 28.
9. 19. 29.
10. 20. 30.
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Intermediate Accounting III

ACTIVITY – STATEMENT OF COMPREHENSIVE INCOME

Name: _________________________________ Date: _

1) DG Company provided the following information for the current year:

What is the net income for the current year? .

What amount is presented as income from continuing operations? .

3) What amount should Vane report as the cost of goods manufactured? .

Increase in raw materials inventory 200,000

What is the cost of goods sold for the current year? .

7) The amount reported in the Profit or Loss section for 2021 is .

Dream Company’s profit before tax is .

What is the profit for the year? .

What was Marjorie Company’s profit for the year 2020? .

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