ACTIVITY: STATEMENT OF COMPREHENSIVE INCOME
THEORIES:
A. MULTIPLE CHOICE
1. S1: Extraordinary items are presented within the statement of comprehensive income
provided they are material.
S2: Additional disclosures are required when expenses under the function of expense
method.
S3: Presenting only an income statement is allowed by the standards.
a. False; True; False c. True; False; False
b. False; True; True d. True; True; True
2. Which of the following are the major components of the income statement of a company?
a. Expenses c. Investment
b. Revenues d. Both A and B
3. The statement that represents the financial performance and changes in equity during a period
from transactions and other events, other than those resulting from owner’s transactions is/can
be called as the
(1) Statement of comprehensive income
(2) Statement of profit/loss and other comprehensive income
(3) Statement of other comprehensive income
(4) Income Statement
a. 1 and 2 only c. 1, 2 and 4 only
b. 1 and 4 only d. 1, 2, 3, and 4
4. Separate line items in an analysis of expenses by their function includes
a. Cost of sales, administrative expenses, distribution expenses
b. Purchases, employee benefits, depreciation, extraordinary items
c. Depreciation, purchases, employee benefits, advertising costs
d. Purchases, distribution costs, administrative costs, employee benefits
5. S1: Statement of Comprehensive income is a flow statement.
S2: Statement of Comprehensive Income should be presented using single statement
presentation only.
a. True; False c. True; True
b. False; True d. False; False
B. TRUE/FALSE
6. If profit is ₱100 while other comprehensive income is ₱80, net income is ₱180.
7. Revenue encompasses income and gains.
8. The income statement is a structured representation that shows the revenues and expenses of
the company over a period of time.
9. Losses incurred on sales of noncurrent assets are presented under “Administrative expenses.”
10. The categories of expenses under the function of expense method include “Cost of sales,”
“Distribution costs,” and “Administrative expenses” only.
PROBLEMS
KAGEYAMA CORP. has the following information on December 31, 2022:
Cost of Sales is P 260, 000.
Operating Expenses are 13% of Sales and 20% of Cost of Sales.
Interest Expense is 5% of Sales.
Income Tax Rate is 30%. There were no temporary differences during the year.
11. Under the nature of expense method, what will be the gross profit?
a. 120,000 c. 140,000
b. 130,000 d. None of the Choices
12. Compute for the income after tax for the year.
a. 40,800 c. 42,500
b. 33,600 d. 47,600
The following items were presented for the purpose of determining comprehensive income.
Profit for the year 2,000
Increase in revaluation surplus 1,000
Remeasurements of the net defined benefit liability (asset) – loss (200)
Net change in translation of foreign operation (400)
Dividends declared (100)
Stock rights 300
13. How much is the other comprehensive income?
a. 800 c. 1,000
b. 600 d. 400
14. How much is the total comprehensive income?
a. 2,800 c. 3,000
b. 2,600 d. 2,400
HINATA COMPANY reported operating expenses in two categories – distribution and general
and administrative. Half of the rented premises is occupied by the sales department.
The adjusted trial balance at year end included the following expense and loss accounts for
current year:
Accounting and Legal Fees 1,450,000
Advertising 1,500,000
Freight Out 750,000
Interest Expenses 600,000
Loss on abandoned processing equipment 300,000
Officers’ salaries 2,250,000
Rent for office space 1,800,000
Sales salaries and commissions 1,400,000
15. What amount should be reported as total distribution cost?
a. 6,000,000 c. 4,900,000
b. 3,650,000 d. 4,550,000
16. What amount should be reported as total general and administrative cost?
a. 4,900,000 c. 5,200,000
b. 5,500,000 d. 4,600,000
