P4.12 Joe Schreiner, controller for On Time Clock Company Inc., recently prepared the companys income statement and statement of changes in equity for 2023. Joe believes that the statements are a fair presentation of the companys financial progress during the current period, but he also admits that he has not examined any recent professional pronouncements on accounting.

Instructions

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.

\begin{tabular}{|c|c|c|} \hline \multicolumn{3}{|c|}{OnTimeClockCompanyInc.IncomeStatementFortheYearEndedDecember31,2023} \\ \hline Sales revenues & & $358,675 \\ \hline Cost of goods sold & & 198,112 \\ \hline Gross profit & & 160,563 \\ \hline Selling expenses & 41,850 & \\ \hline Administrative expenses & 32,142 & 73,992 \\ \hline Income before income tax & & 86,571 \\ \hline \multicolumn{3}{|l|}{ Other revenues and gains } \\ \hline Unrealized gain on FV-OCI equity investments & & 36,000 \\ \hline \multirow[t]{2}{*}{ Dividend revenue } & & 40,000 \\ \hline & & 162,571 \\ \hline Income tax expense & & 56,900 \\ \hline Net income & & $105,671 \\ \hline \end{tabular} \begin{tabular}{|c|c|c|c|} \hline \multicolumn{4}{|c|}{OnTimeClockCompanyInc.ExcerptfromStatementofChangesinEquityFortheYearEndedDecember31,2023} \\ \hline Retained earnings, January 1, 2023 & & & $216,000 \\ \hline \multicolumn{4}{|l|}{ Add: } \\ \hline Net income for 2023 & $105,671 & & \\ \hline Gain on disposal of long-term investments & 31,400 & $137,071 & \\ \hline \multicolumn{4}{|l|}{ Deduct: } \\ \hline Loss on expropriation & 13,000 & & \\ \hline Correction of mathematical error (net of tax) & 17,186 & (30,186) & 106,885 \\ \hline \end{tabular}