The trial balance of XYZ COMPANY shows the following items of income and expense for the period ended December 31, 2019:
Accounts Dr. Cr.
Sales 1,800,000
Interest income 120,000
Gains 40,000
Inventory, beg.100,000
Purchases400,000
Freight-in20,000
Purchase returns 10,000
Purchase discounts 14,000
Freight-out50,000
Sales commission60,000
Advertising expense30,000
Salaries expense600,000
Rent expense60,000
Depreciation expense80,000
Utilities expense40,000
Supplies expense20,000
Transportation and travel expense10,000
Insurance expense24,000
Taxes and licenses140,000
Interest expense4,000
Miscellaneous expense2,000
Loss on the sale of equipment30,000
Totals 1,670,000 1,984,000
Additional information:
a. Ending inventory is ₱160,000.
b. One-half of the salaries, rent, and depreciation expenses pertain to the sales department. The sales department does not share in the other expenses.
Requirements:
a. Prepare the statement of comprehensive income using the function of expense method (Multi-step approach). Be sure to place a proper heading for the statement.
b. Prepare a partial “notes” showing breakdowns for the selected line items.