Answered step by step
Verified Expert Solution
Question
1 Approved Answer
P4.6 (L02,3,4,5) (Statement Presentation) Presented below is a combined income and retained earnings statement for Sapporo Ltd. for 2019 (amounts in thousands). 640,000 500,000 66,000
P4.6 (L02,3,4,5) (Statement Presentation) Presented below is a combined income and retained earnings statement for Sapporo Ltd. for 2019 (amounts in thousands). 640,000 500,000 66,000 17,000 583,000 57,000 Net sales Costs and expenses Cost of goods sold Selling, general, and administrative expenses Other, net Income before income tax Income tax Net income Retained earnings at beginning of period, as previously reported Adjustment required for correction ol error Retained earnings at beginning of period, as restated Dividends on ordinary shares Retained earnings at end of period 19,400 37,600 141,000 (7,000) 134,000 (12,200) 159,400 Additional facts are as follows. 1. "Selling, general, and administrative expenses" for 2019 included a charge of 48,500,000 for im- pairment of intangibles 2. "Othernet" for 2019 was a loss on sale of equipment of 117,000,000. 3. "Adjustment required for correction of an error" was a result of a change in estimate (useful life of certain assets reduced to 8 years and a catch-up adjustment made). 4. Sapporo Company disclosed earnings per share for net income in the notes to the financial statements Instructions Determine from these additional facts wheth the presentation of the facts in the Sapporo Ltd. income and retained earnings statement is appropriate. The presentation is not appropriate, describe the appro- priate presentation and discuss its theoretical rationale. (Do not prepare a revised statement
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started