Chapter 5, Problem 5.4IFRS

(a)

To determine

Income Statement

Income Statement is prepared by all the companies by enumerating all the expenses and revenues in the statement to calculate the resulting difference of Net Profit or Net Loss.

Single-step Income Statement

Single-step Income Statement is the Income Statement with a format that deducts all the expenses from the revenues without any classification.

Multiple-step Income Statement

Multiple-step Income Statement is the Income Statement with a format that deducts the expenses from the revenues with sub-classification. It clearly differentiates the profit at different levels as Gross Profit, Operating Income and Net Profit.

The Income Statement format used by L Company as single-step or multiple-step.

(b)

To determine

Label used by L Company for interest costs.

(c)

To determine

Composition of inventory and amount of inventory before impairment.