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BYP 5-5 (Continued)
(c) FAMILY DEPARTMENT STORE
Income Statement
For the Year Ended December 31, 2015
Net sales ............................................................. $742,000
Cost of goods sold ............................................ 563,920
Gross profit ........................................................ 178,080
Operating expenses
If both plans are implemented, net income will be $58,240 ($85,240 –
BYP 5-6 COMMUNICATION ACTIVITY
(a), (b)
President
Surfing USA Co.
Dear Sir:
Typically, sales revenues are earned when the goods are transferred to the
buyer from the seller. At this point, the sales transaction is completed and
Whether Connor makes a down payment with the purchase order is
irrelevant in recognizing sales revenue because at this time, you have not
BYP 5-7 ETHICS CASE
(a) Jacquie Boynton, as a new employee, is placed in a position of res-
just assumed.
(b) The stakeholders (affected parties) are:
Jacquie Boynton, the assistant treasurer.
(c) Jacquie’s alternatives:
1. Tell the treasurer (her boss) that she will attempt to take every allow-
and may jeopardize her continued employment.
2. Join the team and continue the unethical practice of taking undeserved
cash discounts.
3. Go over her boss’s head and take the chance of receiving just and
reasonable treatment from an officer superior to Phelan. The
company may not condone this practice. Jacquie definitely has a
choice, but probably not without consequence. To continue the
BYP 5-8 ALL ABOUT YOU
In order for revenue to be recognized the performance obligation must be
satisfied. In this case Impact has an obligation to provide goods with a
BYP 5-9 FASB CODIFICATION ACTIVITY
(a) (1) Inventory is the aggregate of those items of tangible personal
property that have any of the following characteristics:
a. Held for sale in the ordinary course of business
to be available for sale.
The term inventory embraces goods awaiting sale (the merchandise of
a trading concern and the finished goods of a manufacturer), goods
in the course of production (work in process), and goods to be
(2) A customer is a reseller or a consumer, either an individual or a
business that purchases a vendor’s products or services for end use
BYP 5-9 (Continued)
(b) 330-10-35-15 Only in exceptional cases may inventories properly be
stated above cost. For example, precious metals having a fixed monetary
value with no substantial cost of marketing may be stated at such
IFRS EXERCISES
IFRS5-1
IFRS5-2
By function
Cost of goods sold
By nature
Depreciation expense
By nature
Salaries and wages expense
By function
Selling expenses
By nature
Utilities expense
By nature
Delivery expense
By function
General and administrative expenses
IFRS5-3
MATILDA COMPANY
Comprehensive Income Statement
For the Year Ended 2015
(in thousands of euros)
Net income ............................................................................... €150
Unrealized gain related to revaluation of buildings .............. € 10
INTERNATIONAL FINANCIAL REPORTING PROBLEM
IFRS5-4
arrive at net income.
(b) Zetar uses Finance Costs rather than Interest Expense on its income
statement.
are non-recurring material costs or revenues of an unusual nature that
have been excluded from the Adjusted results on the income statement
in order to provide a more consistent measure of underlying performance.
