The trial balance for the year ended December 31, 20x5 for the Herman Corp. is as follows. Comparative figures for 20x4 are also provided. Note that the accounts are listed in alphabetical order. The net income for the year ended December 31, 20x5 has yet to be closed out to retained earnings. The OCI gains and losses for the year have not yet been A*OCI accounts.

Additional Information –

Accounts receivable of $15,000 were written off during the year.

Equipment costing $65,000 was acquired during the year.

One FVTOCI investment whose carrying value was $70,000 on December 31, 20x4 was

sold for $80,000 during the year. The asset’s original cost was $55,000.

The fair value losses on FVTPL investments amounted to $16,000 and are included in

operating expenses.

Required –

a) Prepare a Statement of Comprehensive Income for the year ended December 31, 20x5.

b) Prepare a Statement of Financial Position as at December 31, 20x5. Show the 20x4  comparative balances.

c) Prepare a Statement of Cash Flow for the year ended December 31, 20x5. Calculate the  cash flow from operations using the indirect method.

d) Calculate the cash flow from operations using the direct method.

Transcribed Image Text:

20x5 20x4 Dr. Cr. Dr. Cr. A*OCI - FVTOCI Investments A*OCI - Revaluation Surplus Accounts payable 5,000 26,000 483,000 30,000 26,000 550,000 Accounts receivable 315,000 290,000 Accumulated Depreciation - Buildings Accumulated Depreciation - Equipment Allowance for doubtful accounts 395,000 360,000 57,000 70,000 34,000 26,500 Buildings Cash 1,250,000 88,000 950,000 56,000 Common Shares 1,200,000 1,200,000 Cost of Goods Sold 1,254,500 Deferred revenues 56,000 88,000 Depreciation expense - Building Depreciation expense - Equipment Equipment FVTPL Investments 35,000 15,000 215,000 191,000 295,000 255,500 190,000 175,000 250,000 FVTOCI Investments Income tax expense Income taxes payable Inventory Land Loss on sale of equipment OCI - Gain on land revaluation 11,000 26,000 614,000 721,000 8,000 589,000 525,000 70,000 OCI - Loss on FVTOCI Investments Operating expenses Prepaid expenses Retained Earnings Revenue 65,000 875,000 9,800 14,500 608,000 3,261,800 $6,206,800 $6,206,800 $3,039,500 $3,039,500 663,000 20x5 20x4 Dr. Cr. Dr. Cr. A*OCI - FVTOCI Investments A*OCI - Revaluation Surplus Accounts payable 5,000 26,000 483,000 30,000 26,000 550,000 Accounts receivable 315,000 290,000 Accumulated Depreciation - Buildings Accumulated Depreciation - Equipment Allowance for doubtful accounts 395,000 360,000 57,000 70,000 34,000 26,500 Buildings Cash 1,250,000 88,000 950,000 56,000 Common Shares 1,200,000 1,200,000 Cost of Goods Sold 1,254,500 Deferred revenues 56,000 88,000 Depreciation expense - Building Depreciation expense - Equipment Equipment FVTPL Investments 35,000 15,000 215,000 191,000 295,000 255,500 190,000 175,000 250,000 FVTOCI Investments Income tax expense Income taxes payable Inventory Land Loss on sale of equipment OCI - Gain on land revaluation 11,000 26,000 614,000 721,000 8,000 589,000 525,000 70,000 OCI - Loss on FVTOCI Investments Operating expenses Prepaid expenses Retained Earnings Revenue 65,000 875,000 9,800 14,500 608,000 3,261,800 $6,206,800 $6,206,800 $3,039,500 $3,039,500 663,000

Answer rating: 100% (QA)

Herman Corp Statement of Comprehensive Income for the year ended 311220x5 Particulars Sales Revenu... View the full answer