Question 2: Preparation and Presentation of the Income StatementFlexible and Confused Limited has just employed you as the newfinance director. The first task you have been assigned to completeis to prepare the income statement for the 12-month period endedMarch 31, 2018. On your desk on your first day, the previousfinance director left valuable information to complete the task. 1.During the year Flexible and Confused Limited – a company thatsells dishwashers – sold a total of 13,187,000 units at an averagesales price of $41.25. 2. The old finance director also indicatedthat direct labour, direct material and applied overhead were equalto 20%, 12% and 25% of total sales revenue. 3. Following is a listof other expenses incurred by the company. Expense Account TotalIncurred Advertising and Marketing Costs $5,512,000.00 SalesEntertainment $2,561,000.00 Selling Insurance $690,000.00 OfficeRepairs and Maintenance $1,590,000.00 Office Depreciation$14,457,000.00 Wages of General Operations Staff $12,801,000.00Salaries Sales Staff $11,036,000.00 Administrative Travel Costs$1,260,000.00 4. On January 1, 2018, the company sold a piece ofequipment held for investment and recognized a loss on the sale of$4,221,000. 5. The company also enjoyed revenue from other sourcesnoted as: Other Income totalling $9,050,000 and Interest Revenuetotalling $8,661,000. 6. On April 1, 2017, the company sold landthat resulted in a loss of $4,891,000. 7. If the company reports aprofit during the year, the effective corporate tax rate is 25%. Ifa loss is reported the effective tax rate is zero. 8. The companyincurred finance interest charges during the accounting period of$22,890,000. 9. The company is involved in joint ventureoperations. As a result of goof financial conditions, the companyrecorded a net gain of $6,079,000 from its share of the jointventure operations. 10. From the operations of its associate firms,the company expects to record a net gain of $42,287,000 for thefinancial period ended March 31, 2019. Required: Using theinformation supplied, prepare an income statement for Flexible andConfused Limited for the accounting period that conforms with IFRSIAS 1 recommendation and course requirements. (Hint: Expensesshould be classified by function (e.g., cost of goods sold) notnature.
explain and justify all your answer clearly with stepsthanks
