Reference no: EM133149402
Question - The statement of profit or loss and other comprehensive income of FFF Corporation for the first quarter ended March 31, 2021 is shown below:
|
Revenue
|
9,000,000
|
|
Cost of Goods Sold
|
(5,000,000)
|
|
Gross Profit
|
4,000,000
|
|
Other Operating Expenses
|
(2,800,000)
|
|
Insurance Expense
|
(60,000)
|
|
Commission Expense
|
(80,000)
|
|
Profit from Continuing Operations
|
1,060,000
|
|
Discontinued Operations
|
(200,000)
|
|
Profit for the Year
|
860,000
|
|
Other Comprehensive Income:
|
-
|
|
Comprehensive Income
|
860,000
|
Additional Information:
FFF takes a two-year fire insurance on January 1, 2021 for P60,000.
On January 28, 2021, the FFF acquires 10% interest in the ordinary shares of MMM Co. for P1,500,000. Transactions costs on the acquisition amounts to P80,000. The transaction costs are recognized as commission expense. The investment is classified as held for trading securities. The fair value of the investment on March 31, 2021 is P1,450,000. FFF Corp. does not recognize the change in fair value because FFF strongly believes that the fluctuation in fair value is only temporary. In fact, the fair value of the investment increases to P1,580,000 on April 5, 2021.
On March 16, 2021, FFF commits to a plan to sell a component of an entity. All the conditions under PFRS 5 are met. The carrying amount of the net assets of the component is P3,000,000 while the fair value less costs to sell is P2,800,000. The component incurs an operating loss of P800,000 during the first quarter. FFF decides to spread out the operating loss over the interim periods. The component is sold on April 8, 2021.
Required - Prepare a correct statement of profit or loss and other comprehensive income for FFF Corporation. (Ignore income taxes).