Republic of the Philippines

North Eastern Mindanao State University

FINANCIAL ANALYSIS AND

REPORTING

STATEMENTS OF COMPREHENSIVE

INCOME

REPORTERS:

VICENTE CORVERA

GENIE A. SANCHEZ

ROSEJEAN ALITCHA

Rosario, Tandag City, Surigao del Sur 8300

086-211-4221
www.nemsu.edu.ph
 Republic of the Philippines
North Eastern Mindanao State University

Course Intended Learning Outcome

 Identify the elements in the statements of financial position

 Prepare the statement of financial position

Rosario, Tandag City, Surigao del Sur 8300

086-211-4221
www.nemsu.edu.ph
 Republic of the Philippines
North Eastern Mindanao State University

STATEMENT OF COMPREHENSIVE INCOME - Also known as the income statement.

Contains the results of the company’s operations for the specific period of time which is called
net income if it is a net positive result while a net loss if it is a net negative result.
a. Revenue generated by operating activities.
b. Cost spent to generate the revenue
c. Income, which is the excess of revenue over costs.
TEMPORARY ACCOUNTS – Also known as nominal accounts are the accounts found under
the SCI. They are called such because at the end of the accounting period, balances under
these account are transferred to the capital account, thus having temporary amounts and
resulting to zero beginning balances at the beginning of the following year.
Examples: revenues, sales, utilities expense, salaries expense, depreciation expense,
interest expense among others.
“For the Period”
The SCI is described as “for the period” report. This means that the amounts
presented on the report include only those the occurred within the given period. This can be
prepared for a month, a quarter or a year. This statement contains the following information:
Elements of Statement of Comprehensive Income
1. Income/Revenue – refers to the increase in the economic benefits of the entity that may be
a result of enhancement or inflow of asset or such decrease in the liability that causes
the equity to increase. However, this does not include additional investments made by
the owners or shareholders.
2. Expense – is decrease in the economic benefits of the entity that maybe results of
deterioration or outflow of asset or such increase in liability that causes equity to decrease.
However, this does not include distributions to owners or shareholders.

ABC COMPANY
STATEMENT OF COMPREHENSIVE INCOME
FOR THE MONTH OF DECEMBER 31, 2019

Rosario, Tandag City, Surigao del Sur 8300

086-211-4221
www.nemsu.edu.ph
 Republic of the Philippines
North Eastern Mindanao State University

Revenues Php
1,290,000.00
Less:
Expenses
890,000.00
Net Income Php 400,000.00

CLASSIFICATION OF INCOME as to revenue and gains is dependent on the nature of the

business.
Difference of the Statement of Comprehensive Income of a Service Company and of a
Merchandising Company

Service Company : is a business that generates income by providing services instead of

selling products. A good example of a service company is a public accounting firm. They earn
revenues by preparing income tax returns, performing audit and asset services, and even
doing bookkeeping.
Merchandising company: is a company that buys goods and then resells them, generally for
the higher price than they were purchased.
There are two types of merchandising companies – retail and wholesale. A retail company is a
company that sells products directly to customers, whereas a wholesale company is a
company that buys items in bulk from manufacturers and resells them to retailer or other
wholesalers.
Revenues
1. Sales - An account used to summarize sale of goods of a trade or merchandising business.
This includes cash sales and sales on account.
2. Service Income - The earning derived from service rendered by a service business to its
customers. This includes cash and on account service.
3. Professional Fees - The earning derived from services rendered by a professional or

Rosario, Tandag City, Surigao del Sur 8300

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 Republic of the Philippines
North Eastern Mindanao State University
professional servicing firm which could be in cash or in collectibles to its clients.
4. Interest Income - The earning representing the time value of money derived from promissory
notes received by the business, whether in cash or collectibles in the future.
5. Rent Income - The income earned from allowing others to use property or facility of the
business.
6. Gain on Sales of other Assets - The income derived from the sales of assets used in the
business operation. There is a gain on sale if the proceeds exceed the book value or cost of
disposed asset.
Cost of Sales and Expenses

1. Cost of Sales or Cost of Goods Sold - The value of merchandise sold.

2. Salaries and Wages Expense - The amount paid to service rendered by the employees in
the operation of the business.
3. Utilities Expense - This includes telephone, water, and electricity used.
4. Rent Expense - This includes rentals for the use of equipment, office, building, and land
spaces owned by others.
5. Supplies Expense - The amount of supplies consumed or used by the business during the
period. Examples: used in papers, inks, ballpoint pens, etc.
6. Transportation Expense - This includes fare for trips and travels; cost of gasoline and oil
used for company vehicles.
7. Depreciation Expense - This includes portion of the cost of building and equipment allocated
to one accounting period.
8. Representation Expense - This includes the amount paid to restaurants, hotels for treating
customers and others.
9. Interest Expense - This includes interest on debts or monetary obligations.
10. Insurance Expense - The amount of insurance policy incurred during the current period..
Examples; premiums on building insurance, life insurance, plant insurance, etc.
11. Taxes and Licenses Expenses - The cost of local as well as national taxes that are
incurred and required to be paid in connection with the conduct of the business. Examples;

Rosario, Tandag City, Surigao del Sur 8300

086-211-4221
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 Republic of the Philippines
North Eastern Mindanao State University
cost to acquire mayor’s permit, registration cost of the building, percentage tax on sales, etc.
12. Doubtful Account Expenses - The estimated amount of losses the uncollectible accounts
arising from credit sales of the current period. This is also called the debt expense or
uncollectible account expense.
13. Loss from sale of assets - If the cash received is less than the asset's book value, the
difference is recorded as a loss.
PRESENTATION OF SCI - There are two formats for the SCI, namely the single – step and
the multi-step.
Single-step – Called single-step because all revenues are listed down in one section while all
expenses are listed in another. Net income is computed using a “single-step” which is Total
Revenues minus Total Expenses.
Multi-step – multi-step because there are several steps needed in order to arrive at the
company’s net income.
Emphasizes that the two are only formats and will yield the
same amount of net income/loss
b. Discuss that single-step SCI is more commonly used by service companies
while multi-step format is more commonly used by merchandising companies.
The Statement of Comprehensive Income or Income Statement contains:
A. The Heading
1. Name of the Business
2. Title of the Report
3. Period
4. Currency (in Philippine Peso)
The SCI of a sole proprietorship shall include the following:
1. Revenue
2. Costs and Expenses
3. Net Income
Steps in preparing single-step SCI
1. Start with writing the heading

Rosario, Tandag City, Surigao del Sur 8300

086-211-4221
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 Republic of the Philippines
North Eastern Mindanao State University
2. List the income account and the amounts
3. List the cost and expense accounts on another amounts column
4. Compute the total cost and expenses
5. Deduct total expenses from the income to arrive at the net income
6. Write the peso sign on the first amount column and on the totals. Double rule.
LEARNING IS FUN COMPANY
STATEMENT OF COMPREHENSIVE INCOME Heading
FOR THE MONTH OF DECEMBER 31, 2016

Service Revenue Revenues Php 100,000.00

Expenses: Expenses
Salaries Expense Php 40,000.00
Rent Expense 20,000.00
Depreciation Expense 10,000.00
Utilities Expense 5,000.00
Miscellaneous Expense 1,000.00 76,000.00

Net Income Net income/loss Php 24,000.00

Liberty Medical Services

Statement of Comprehensive Income
For the Year Ended December 31, 2019

Service income ₱ 9,660,000.00

Cost of Service ₱ 6,030,000.00
Salaries Expense 1,200,000.00
Employees Benefits 200,000.00
Professional Fees 180,000.00

Rosario, Tandag City, Surigao del Sur 8300

086-211-4221
www.nemsu.edu.ph
 Republic of the Philippines
North Eastern Mindanao State University
Utilities Expense 360,000.00
Rent Expense 480,000.00
Taxes and Licenses 120,000.00
Supplies Expense 175,000.00
Advertising Expense 132,000.00
Transportation Expense 240,000.00
Depreciation Expense 60,000.00
Representation Expense 180,000.00
Interest Expense 20,000.00
Total Cost and Expenses 9,377,000.00
Net Income ₱ 283,000.00

Rosario, Tandag City, Surigao del Sur 8300

086-211-4221
www.nemsu.edu.ph