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P4.12 Toe Schreiner, controller for On Time Clock Company Inc., recently prepared the company's income statement and statement of changes in equity for 2020. Schreiner believes that the statements are a fair presentation of the company's financial progress during the current period, but he also admits that he has not examined any recent professional pronouncements on accounting. On Time Clock Company Inc. Income Statement For the Year Ended December 31, 2020 Sales revenues $358,675 Cost of goods sold 198,112 Gross profit 160,563 Selling expenses 41,850 Administrative expenses 32,142 73,992 Income before income tax 86,571 Other revenues and gains Unrealized gain on FV-OCI equity investments 36,000 Dividend revenue 162,571 Income tax expense 56,900 Net income $105,671 40,000 13,000 On Time Clock Company Inc. Excerpt from Statement of Changes in Equity For the Year Ended December 31, 2020 Retained earnings, January 1, 2020 $216,000 Add: Net income for 2020 $105,671 Gain on disposal of long-term investments 31,400 $137,071 Deduct: Loss on expropriation Correction of mathematical error (net of tax) 17,186 (30,186) 106,885 Retained earnings, December 31, 2020 $322,885 Instructions a. Assume that On Time Clock Company follows IFRS. Assume that investments are accounted for as FV- OCI equity investments with gains/losses not recycled through net income. Prepare a statement of financial performance showing expenses by function. Ignore calculation of EPS. b. Prepare the retained earnings and accumulated other comprehensive income portion of the statement of changes in equity. Assume an opening balance of $120,000 in accumulated other comprehensive income. c. Will the sum of the Accumulated Other Comprehensive Income and Retained Earnings at December 31, 2020, using the revised financial statement equal the sum of the Accumulated Other Comprehensive Income and the Retained Earnings balance from the original draft of the financial statement prepared by the controller? If not, explain any differences