P$4\mathrm{.}12$ Joe Schreiner, controller for On Time Clock Company Inc., recently prepared the company's in$-$

come statement and statement of changes in equity for $2020.$ 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.

On Time Clock Company Inc.

Excerpt from Statement of Changes in Equity

For the Year Ended December $31,2020$

Retained earnings, January $1,2020$

Add:

Instructions

a$.$ 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.

b$.$ Prepare the retained earnings and accumulated other comprehensive income portion of the state$-$

ment of changes in equity. Assume an opening balance of $$120,000$ in accumulated other compre$-$

hensive income.

c$.$ Digging Deeper Will the sum of the Accumulated Other Comprehensive Income and Retained

Earnings at December $31,2020,$ using the revised financial statement equal the sum of the Accumu$-$

lated Other Comprehensive Income and the Retained Earnings balance from the original draft of

the financial statement prepared by the controller? If not, explain any differences.

Answer the question