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Q4-4IFRS

Expert-verified
Intermediate Accounting (Kieso)
Found in: Page 198

Short Answer

Presented below is information related to Viel Company on December 31, 2017, the end of its first year of operations.

Sales revenue $310,000

Cost of goods sold 140,000

Selling and administrative expenses 50,000

Gain on sale of plant assets 30,000

Unrealized gain on non-trading equity securities 10,000

Interest expense 6,000

Loss on discontinued operations 12,000

Allocation to non-controlling interest 40,000

Dividends declared and paid 5,000

Instructions

Compute the following: (a) income from operations, (b) net income, (c) net income attributable to Viel Company controlling shareholders, (d) comprehensive income, and (e) retained earnings balance on December 31, 2017. (Ignore income taxes.)

Income from operations

$120,000

Net income

$132,000

Attributable net income

$127,000

Comprehensive income

$142,000

Retained earnings at December 31, 2017

$127,000

See the step by step solution

Step by Step Solution

Meaning of Financial Information

In accounting, financial information refers to the economic data of a business entity. A business records its financial information daily in the books of accounts, and the same is summarized annually to draft the financial reports.

Computation of income from operations

Particulars

Amounts ($)

Sales revenue

310,000

Less: Cost of goods sold

(140,000)

Gross profit

170,000

Less: Selling and administration expenses

(50,000)

Income from operations

120,000

Computation of net income

Particulars

Amounts ($)

Income from operations

120,000

Other expenses and income

Add: Gain on sale of plant assets

30,000

Total income

150,000

Less: Interest expense

(6,000)

Income from continued operations

144,000

Less: Loss on discontinued operations

(12,000)

Net income

132,000

Computation of net income attributable to controlling shareholders

Particulars

Amounts ($)

Net income

132,000

Less: Dividend declared and paid

(5,000)

Attributable net income

127,000

Computation of comprehensive income

Particulars

Amounts ($)

Net income

132,000

Add: Unrealized gain on non-trading equity securities

10,000

Comprehensive income

142,000

Computation of retained earnings balance

Particulars

Amounts ($)

Net income

132,000

Less: Dividends declared and paid

(5,000)

Retained earnings on December 31, 2017

127,000

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