for this prpblem. i dont get how they set up the earnings statement because when you use the numbers and add or subtract it doesnt even give the same thing

its the statement of earnings i dont get.

At the end of most chapters, one or more demonstration cases are presented. These cases provide an overview of the primary issues discussed in the chapter. Each demonstration case is followed by a recommended solution. You should read the case carefully and then prepare your own solution before you study the recommended solution. This selfevaluation is highly recommended. The introductory cate presented here reviews the elements reported on the statement of earnings and statement of financial position and how the ele ments within each are related. Ivanko Inc. has been in operation for many years. It sells clothing, cosmetics, furniture, and home appliances. Following is a list of the financial statement items and amounts adapted from recent statements of earnings and financial position. The numbers are pre- sented in thousands of dollars for the year ended December 31, 2016. Cash $ 507 Other liabilities $ 4,351 Contributed capital 1.506 Property and equipment 5.154 Cost of sales 6,638 Retained earnings 1.029 Depreciation and amortization 460 Sales revenue 11.162 Intangible assets and goodwill 1,774 Selling, general, and 4,066 administrative expenses Income tax expense 132 Total assets 12.649 Finance costs, net 188 Total liabilities 9.550 Iny ries 3,415 Total liabilities and 12.649 shareholders' equity Loans and borrowings 3.705 Total pretax expenses 10.643 Net earnings 387 Total shareholders' equity 3,099 Other assets 1.297 Trade and other receivables 512 Other components of equity 639 Trade payables 1.494 Required: 1. Prepare a statement of financial position and a statement of earnings for the year, following the formats in Exhibits 1.2 and 1.3. 2. Specify what information these two statements provide. 3. Indicate the other two statements that would be included in Ivanko's annual report. 4. Securities regulations require that the financial statements of Ivanko be subject to an independent audit. Suggest why Ivanko might voluntarily subject its financial statements to an independent audit if there were no such requirement. SUGGESTED SOLUTION IVANKO INC. Statement of Earnings For the Year Ended December 31, 2016 (In thousands of Canadian dollars) Sales revenue $11,162 Expenses Cost of sales 6,638 Selling, general, and administrative expenses 4,066 Depreciation and amortization 460 Finance costs, net 188 Total pretax expenses 10.643 Earings before income tax 219 Income tax expense 132 Net earnings $ 387 IVANKO INC. Statement of Financial Position At December 31, 2016 (In thousands of Canadian dollars) Assets Cash $ 507 Trade and other receivables 512 Inventories 3,415 Property and equipment 5.154 Intangible assets and goodwill 1.774 Other assets 1.287 Total assets $12.649 Liabilities Trade payables 1.494 Loans and borrowings 3.705 Other liabilities At the end of most chapters, one or more demonstration cases are presented. These cases provide an overview of the primary issues discussed in the chapter. Each demonstration case is followed by a recommended solution. You should read the case carefully and then prepare your own solution before you study the recommended solution. This selfevaluation is highly recommended. The introductory cate presented here reviews the elements reported on the statement of earnings and statement of financial position and how the ele ments within each are related. Ivanko Inc. has been in operation for many years. It sells clothing, cosmetics, furniture, and home appliances. Following is a list of the financial statement items and amounts adapted from recent statements of earnings and financial position. The numbers are pre- sented in thousands of dollars for the year ended December 31, 2016. Cash $ 507 Other liabilities $ 4,351 Contributed capital 1.506 Property and equipment 5.154 Cost of sales 6,638 Retained earnings 1.029 Depreciation and amortization 460 Sales revenue 11.162 Intangible assets and goodwill 1,774 Selling, general, and 4,066 administrative expenses Income tax expense 132 Total assets 12.649 Finance costs, net 188 Total liabilities 9.550 Iny ries 3,415 Total liabilities and 12.649 shareholders' equity Loans and borrowings 3.705 Total pretax expenses 10.643 Net earnings 387 Total shareholders' equity 3,099 Other assets 1.297 Trade and other receivables 512 Other components of equity 639 Trade payables 1.494 Required: 1. Prepare a statement of financial position and a statement of earnings for the year, following the formats in Exhibits 1.2 and 1.3. 2. Specify what information these two statements provide. 3. Indicate the other two statements that would be included in Ivanko's annual report. 4. Securities regulations require that the financial statements of Ivanko be subject to an independent audit. Suggest why Ivanko might voluntarily subject its financial statements to an independent audit if there were no such requirement. SUGGESTED SOLUTION IVANKO INC. Statement of Earnings For the Year Ended December 31, 2016 (In thousands of Canadian dollars) Sales revenue $11,162 Expenses Cost of sales 6,638 Selling, general, and administrative expenses 4,066 Depreciation and amortization 460 Finance costs, net 188 Total pretax expenses 10.643 Earings before income tax 219 Income tax expense 132 Net earnings $ 387 IVANKO INC. Statement of Financial Position At December 31, 2016 (In thousands of Canadian dollars) Assets Cash $ 507 Trade and other receivables 512 Inventories 3,415 Property and equipment 5.154 Intangible assets and goodwill 1.774 Other assets 1.287 Total assets $12.649 Liabilities Trade payables 1.494 Loans and borrowings 3.705 Other liabilities