The following information were made available to you by Katz Corp. in line with your audit of its financial statements as of January 1 and for the period ended December 31, 2020: Sales P53,000,000 Purchases 32,000,000 Sales discount 2,000,000 Purchase discount 1,200,000 Sales returns and allowance 1,000,000 Purchase returns and allowance 800,000 Correction of merchandise inventory, beginning error, net of Income tax – credit 400,000 Merchandise Inventory, January 1 (adjusted) 3,400,000 Merchandise Inventory, December 31 3,500,000 Distribution costs 5,000,000 General and administrative expenses 4,000,000 Interest expense 2,000,000 Gain on early extinguishment of long-term debt 500,000 Foreign translation adjustment, net of income tax – credit 1,250,000 Revaluation surplus for the period, net of income tax 700,000 Unrealized loss on financial assets at fair value through other comprehensive income or losses, net of income tax 550,000 Investment income – equity method 3,000,000 Gain on expropriation of asset 2,000,000 Income tax expense 5,000,000 Proceeds from sale of land with a carrying value of P5,300,000 4,800,000 Dividends declared 1,300,000 Accumulated profits, January 1, 2020 4,200,000 Requirements: 1. In a single-statement, statement of comprehensive income, how much shall be reported as cost of goods sold? a. 30,000,000 c. 29,600,000 b. 29,900,000 d. 29,100,000

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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The following information were made available to you by Katz Corp. in line with your audit of its financial statements as of January 1 and for the period ended December 31, 2020: Sales P53,000,000 Purchases 32,000,000 Sales discount 2,000,000 Purchase discount 1,200,000 Sales returns and allowance 1,000,000 Purchase returns and allowance 800,000 Correction of merchandise inventory, beginning error, net of Income tax – credit 400,000 Merchandise Inventory, January 1 (adjusted) 3,400,000 Merchandise Inventory, December 31 3,500,000 Distribution costs 5,000,000 General and administrative expenses 4,000,000 Interest expense 2,000,000 Gain on early extinguishment of long-term debt 500,000 Foreign translation adjustment, net of income tax – credit 1,250,000 Revaluation surplus for the period, net of income tax 700,000 Unrealized loss on financial assets at fair value through other comprehensive income or losses, net of income tax 550,000 Investment income – equity method 3,000,000 Gain on expropriation of asset 2,000,000 Income tax expense 5,000,000 Proceeds from sale of land with a carrying value of P5,300,000 4,800,000 Dividends declared 1,300,000 Accumulated profits, January 1, 2020 4,200,000 Requirements: 1. In a single-statement, statement of comprehensive income, how much shall be reported as cost of goods sold? a. 30,000,000 c. 29,600,000 b. 29,900,000 d. 29,100,000 2. In a single-statement, statement of comprehensive income, how much shall be reported as net income after tax before other comprehensive income/losses? a. 8,600,000 c. 9,600,000 b. 9,100,000 d. 10,100,000 3. In a single-statement, statement of comprehensive income, how much shall be reported as total other comprehensive income after tax? a. 2,400,000 c. 1,250,000 b. 1,400,000 d. 150,000 4. In a single-statement, statement of comprehensive income, how much shall be reported as total comprehensive income after tax for the year? a. 9,500,000 c. 10,500,000 b. 10,000,000 d. 11,000,000 5. What is the adjusted balance of the accumulated profits, and as December 31, 2020? a. 10,500,000 c. 12,400,000 b. 12,000,000 d. 12,900,000

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