Requirements: a) Prepare the statement of comprehensive income of Lunch Co. using the single statement presentation and the function of expense method. Make a proper heading for the financial statement. Apply the general feature of "materiality and aggregation." b) Make the additional disclosures for the breakdown of line items in the financial statement. Make proper cross- profit loss and or referencing of those notes; use "Note 12" as your first cross- reference. Answers / Solutions: Requ'ement (3): Lunch Co. Statement of profit or loss and other comprehensive income For the year ended December 31, 20x1 Notes Sales 22,000,000 Cost of goods sold 12 (6,000,000) Gross profit 16,000,000 Distribution costs 13 (2,230,000) Administrative expenses 14 (3,050,000) Impairment loss on financial assets (190,000) Finance costs (340,000) Profit before tax 10,190,000 Income tax expense (2,000,000) Profit for the year 8,190,000 Other comprehensive income Items that will not be reclassified subsequently: Investments in equity instruments 200,000 Items that may be reclassified subsequently to profit or loss: Cash flow hedges 30,000 Other comprehensive income for the yr., net of tax 230,000