a. Prepare the statement of profit or loss and othercomprehensive income of Lunch Co. using the singlestatement presentation and the function of expense method.Make a proper heading for the financial statement. Apply thegeneral feature of "materiality and aggregation."b. Make the additional disclosures for the breakdown of lineitems in the financial statement. Make proper cross-referencing of those notes; use "Note 12" as your first cross-reference. 7. The records of Lunch Co. on December 31, 20x1 show thefollowing information:Credits22,000,000DebitsSalesBeginning inventory1,700,000Purchases5,600,000Purchase returns500,000400,000Freight inSaláries of sales personnel670,000340,000Interest expenseAdvertising expenseResearch and development expense320,000180,0002,000,000520,000Directors' remunerationSalaries of administrative personnelRent expenseDepreciation expenseCommission.expenseImpáirment loss on financial assetsInsurance expenseIncome tax expenseUnrealized gain on equity securities - FVOCIGain on change in fair value - Cash flow hedge280,000160,0001,100,000190,00050,000- 2,000,000200,00030,00015,510,000 22,730,000TotalsAdditional information:Ending inventory amounts to P1,200,000.-• One-half of the rent expense pertains to the sales department.• The impairment loss on financial assets pertainsimpairment of receivables recognized on contracts 'withcustomers.• The items of other comprehensive income are net of tax.• The gain on change in fair value on the cash flow hedgerepresents the effective portion.Requirements:

An income statement is one of the important statements in a company's financial statements that…

7. The records of Lunch Co. on December 31, 20x1 show following information: Debits Credits 22,000,000 Sales . Beginning inventory Purchases 1,700,000 5,600,000 Purchase returns 500,000 Freight in Saláries of sales personnel Interest expense Advertising expense Research and development expense Directors' remuneration 400,000 670,000 340,000 320,000 180,000 2,000,000 520,000 280,000 160,000 Salaries of administrative personnel Rent expense Depreciation expense Commission.expense Impáirment loss on financial assets Insurance expense Income tax expense Unrealized gain on equity securities - FVOCI Gain on change in fair value - Cash flow hedge Totals 1,100,000 190,000 50,000 · 2,000,000 200,000 30,000 15,510,000 22,730,000 Additional information: Ending inventory amounts to P1,200,000. • One-half of the rent expense pertains to the sales department. The impairment loss on financial assets pertains to impairment of receivables recognized on contracts with customers. The items of other comprehensive income are net of tax. The gain on change in fair value on the cash flow hedge represents the effective portion. Requirements:

7. The records of Lunch Co. on December 31, 20x1 show following information: Debits Credits 22,000,000 Sales . Beginning inventory Purchases 1,700,000 5,600,000 Purchase returns 500,000 Freight in Saláries of sales personnel Interest expense Advertising expense Research and development expense Directors' remuneration 400,000 670,000 340,000 320,000 180,000 2,000,000 520,000 280,000 160,000 Salaries of administrative personnel Rent expense Depreciation expense Commission.expense Impáirment loss on financial assets Insurance expense Income tax expense Unrealized gain on equity securities - FVOCI Gain on change in fair value - Cash flow hedge Totals 1,100,000 190,000 50,000 · 2,000,000 200,000 30,000 15,510,000 22,730,000 Additional information: Ending inventory amounts to P1,200,000. • One-half of the rent expense pertains to the sales department. The impairment loss on financial assets pertains to impairment of receivables recognized on contracts with customers. The items of other comprehensive income are net of tax. The gain on change in fair value on the cash flow hedge represents the effective portion. Requirements:

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Prepre Journal Entries May Made cash sales of $7,100; the cost of the inventory was $3,600. 1 5 Purchased $2,400 of inventory on credit. 9. Made credit sales of $3,300; the cost of the inventory sold was $2,100. 13 Paid sales salaries of $1,100 and office salaries of $400.
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