Exercise 4-10 The following is information for Ayayai Corp. for the year ended December 31, 2017:...

Exercise 4-10

The following is information for Ayayai Corp. for the year ended December 31, 2017:

Net sales revenue	$1,470,000	Loss on inventory due to decline in net realizable value (NRV)	$85,000
Unrealized gain on FV-OCI investments	40,000	Loss on sale of equipment	30,000
Interest income	6,000	Depreciation expense related to buildings omitted by mistake in 2016	59,000
Cost of goods sold	882,000	Retained earnings at December 31, 2016	970,000
Selling expenses	73,500	Loss—other (due to expropriation of land)	61,000
Administrative expenses	46,000	Dividends declared	49,000
Dividend revenue	20,000

The effective tax rate is 25% on all items. Ayayai prepares financial statements in accordance with IFRS. The FV-OCI investments trade on the stock exchange. Gains/losses on FV-OCI investments are recycled through net income.

1. Prepare a multiple-step statement of comprehensive income for 2017, showing expenses by function. Ignore calculation of EPS.

2. Prepare the retained earnings section of the statement of changes in equity for 2017. (List items that increase retained earnings first following the adjustment of prior years.)

3. Prepare the journal entry to record the depreciation expense omitted by mistake in 2016. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.)

Expert Solution

ekkarill92 answered 1 year ago

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