Question

Canada Wheels Ltd. manufactures and sells parts for automobiles. Canada Wheels Ltd. has the following balances in its general ledger on December 31, 2018. (In thousands of Canadian dollars).

The company had 15,000 common shares outstanding throughout this fiscal year. The company did not have any preferred shares.   Assume that the income tax rate is 30% on all items.

              

Cost of Sales	90,000
Sales Revenue	143,700
Interest Expense on L/T Debt	21,000
Selling and Administrative expense	12,000
Write-off of obsolete inventory	3,000
Impairment of tangible capital assets	1,500
General Advertising expense	1,000
Amortization Expense	4,000
Restructuring Cost	1,200
Gain on disposal of discontinued segment	15,000
Deferred Loss on Pension Funds	2,500

Required: Prepare, in good form, a comprehensive income statement, using a multi-step format and on the basis of functions of expense. No disclosure notes required.

Answer 1

Answer:

Statement of Profit and loss and other comprehensive income for the year ended 31.12.2018
Continued Operations
Revenue	143,700
Cost of Sales	(93,000)
Gross Profit	50,700
Distribution Expenses	-
Administration Expenses	(18,200)
Operating Profit	32,500
Finance Cost	(21,000)
Investment Income	-
Profit before Tax	11,500
Income Tax Expenses	-
Profit from continuing operations for the period	11,500
Discontinued Operations
Gain on Disposal of Discontinued Segment	15,000
Profi/(Loss) for the period	26,500
Other Comprehensive Income for the year (after tax):
Items that will not be reclassified to profit or loss:
Impairment of Tangible Capital assets	(1,500)
Deferred Loss on Pension Funds	(2,500)
Items that may be reclassified subsequently to profit or loss:	-
Total Comprehensive Income for the period	22,500
Workings
Administration Expenses
Selling and Administrative expense	12000
Restructurng Cost	1200	Restructuring expense is considered nonrecurring operating expenses
General Advertising expense	1000
Amortization Expense	4000
	18,200
Write-off of obsolete inventory	3,000	Since this is a small amount, we can charge to cost of Goods sold