Joe Schreiner, controller for On Time Clock Company Inc., recently prepared the company's income statement and statement of changes in equity for 2014. 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.

Instructions
(a) Assume that On Tune Clock Company follows IFRS, and that the company accounts for its investments in accordance with IAS 39. Prepare a statement of comprehensive income 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.

ON TIME CLOCK COMPANY INC. Income Statement For the Year Ended December 31, 2014 Sales revenues Less: Sales returns and allowances Net sales revenue Cost of goods sold: $377,852 16,320 361,532 Inventory, January 1, 2014 Purchases Less: Purchase discounts $50,235 189,001 239,236 $192,143 3,142 Cost of goods available for sale Inventory, December 31, 2014 Cost of goods sold 41,124 Gross profit Selling expenses Administrative expenses Income before income tax Other revenues and gains 198,112 163,420 73,992 89,428 41,850 32,142 Unrealized gain on fair value-OCI investments Dividend revenue 36,000 40,000 165,428 56,900 $108,528 Income tax Net income ON TIME CLOCK COMPANY INC. Excerpt from Statement of Changes in Equity For the Year Ended December 31, 2014 Retained earnings, January 1, 2014 Add: $216,000 Net income for 2014 Gain on sale of long-term investments $108,528 31,400 $139,928 Deduct 13,000 Loss on expropriation Correction of mathematical error (net of tax) 1186 (30,186) 109,742 $325,742 Retained earnings, December 31, 2014