Topic: Interim Financial Reporting Requirement: Prepare a correct statement of profit or loss and other comprehensive income for Friday Corp. (Ignore income taxes) dividends of P1,000,000 on December 20x1. Friday recognizesthe estimate as dividend income.c. On January 1, 20x1, Friday has an outstanding 12%, long-term,loan receivable with carrying amount of P2,000,000. Althoughthe principal amount is due only at maturity, interests arecollectible every year-end. Friday recognizes interest incomeevery year-end when the interest is collected.d. As of March 31, 20x1, Friday's inventory has a total cost ofP2,800,000 and a net realizable value of P2,200,000. Theinventory decline is not recognized because Friday believesthat it is only temporary. Friday's past experience supportsthis fact.Requirement: Prepare a correct statement of profit or loss and othercomprehensive income for Friday Corp. (Ignore income taxes) 8. The inexperienced accountant of Friday Corp. prepares thefollowing statement of profit or loss and other comprehensiveincome for the first quarter ended March 31, 20x1:9,000,000100,000RevenueDividend income(5,000,000)(60,000)(2,800,000)1,240,000Cost of goods soldCommission expenseOther operating expensesProfitOther comprehensive incomeComprehensive income1,240,000Additional information:a. On January 28, 20x1, the entity acquires 10% interest in theordinary shares of Sunday Co. for P500,000. Transactions costson the acquisition amounts to P60,000. The transaction costsare recognized as commission expense. The investment isclassified as financial asset measured at fair value throughother comprehensive income. The fair value of the investmenton March 31, 20x1 is P450,000. Friday Corp. strongly believesthat the fluctuation in fair value is only temporary. In fact, thefair value of the investment increases to P580,000 on April 5,20x1.b. Sunday Co. has an established practice of declaring dividendsevery year-end. Friday expects that Sunday will declare

Statement of income shows all the income(s) earned by the organization. There are certain ways for…

Answered: Prepare a correct statement of profit…

Business

Accounting

Prepare a correct statement of profit or loss and other comprehensive income for Friday Corp. (Ignore income taxes)

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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