Transcribed Image Text: P4.6 (LO 2, 3, 4, 5) (Statement Presentation) Presented below is a combined income and retained earnings statement for Sapporo Ltd. for

Transcribed Image Text: P4.6 (LO 2, 3, 4, 5) (Statement Presentation) Presented below is a combined income
and retained earnings statement for Sapporo Ltd. for 2022 (amounts in thousands).
Net sales
Costs and expenses
¥640,000
Cost of goods sold
¥500,000
Selling, general, and administrative expenses
66,000
Other, net
17,000 583,000
Income before income tax
57,000
Income tax
19,400
Net income
37,600
Retained earnings at beginning of period, as previously reported 141,000
Adjustment required for correction of error
(7,000)
Retained earnings at beginning of period, as restated
Dividends on ordinary shares
134,000
(12,200)
¥159.400
Retained earnings at end of period
Additional facts are as follows.
1. “Selling, general, and administrative expenses” for 2022 included a charge of
¥8,500,000 for impairment of intangibles.
2. “Other, net” for 2022 was a loss on sale of equipment of Y17,000,000.
3. “Adjustment required for correction of an error” was a result of a change in estimate
(useful life of certain assets reduced to 8 years and a catch-up adjustment made).
4. Sapporo Company disclosed earnings per share for net income in the notes to the
financial statements.
Instructions
Determine from these additional facts whether the presentation of the facts in the Sapporo
Ltd. income and retained earnings statement is appropriate. If the presentation is not
appropriate, describe the appropriate presentation and discuss its theoretical rationale. (Do
not prepare a revised statement.)

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