Preparing a balance sheet and an income statement.
The following information is based on accounting data for Year 7 and Year 8 for China Oil Company (COC), a large petro- chemicals company in China. COC applies IFRS, and reports its results in millions of U.S. dollars.
December 31
|
Balance Sheet Items
|
Year 8
|
Year 7
|
|
Cash
|
$ 88,589
|
$ 54,070
|
|
Accounts Receivable
|
18,419
|
8,488
|
|
Advances to Suppliers
|
20,386
|
12,664
|
|
Inventories
|
88,467
|
76,038
|
|
Other Current Assets
|
20,367
|
13,457
|
|
Property, Plant, and Equipment (net)
|
247,803
|
231,590
|
|
|
(continued)
|
|
Oil and Gas Properties
|
326,328
|
270,496
|
|
Intangible Assets
|
20,022
|
16,127
|
|
Other Noncurrent Assets
|
163,711
|
132,214
|
|
Accounts Payable to Suppliers
|
104,460
|
77,936
|
|
Advances from Customers
|
12,433
|
11,590
|
|
Other Current Liabilities
|
84,761
|
90,939
|
|
Long-Term Debt
|
35,305
|
30,401
|
|
Other Noncurrent Liabilities
|
42,062
|
36,683
|
|
Common Stock
|
444,527
|
354,340
|
|
Retained Earnings
|
270,544
|
213,255
|
|
Income Statement Items
|
|
Year 8
|
|
Net Operating Revenues
|
$835,037
|
|
Interest and Other Revenues
|
3,098
|
|
Cost of Sales
|
487,112
|
|
Selling Expenses
|
41,345
|
|
General and Administrative Expenses
|
49,324
|
|
Other Operating Expenses
|
64,600
|
|
Interest Expense
|
2,869
|
|
Income Taxes
|
49,331
|
a. Prepare an income statement for COC for the year ending December 31, Year 8.
b. Prepare a comparative balance sheet for COC on December 31, Year 7, and December 31, Year 8. Show noncurrent assets before current assets and noncurrent liabilities before current liabilities, as is the customary presentation for IFRS, which COC uses.
c. Prepare an analysis of the change in Retained Earnings during the year ending Decem- ber 31, Year 8.