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Chapter 4: 15E (page 186)

Roxanne Carter Corporation reported the following for 2017: net sales \(1,200,000, cost of goods sold \)750,000, selling and administrative expenses \(320,000, and an unrealized holding gain on available-for-sale securities \)18,000.

Instructions

Prepare a statement of comprehensive income, using (a) the one statement format and (b) the two statement format. (Ignore income taxes and earnings per share.)

Short Answer

Expert verified

The comprehensive income balance shows a balance of $148,000.

Step by step solution

01

Meaning of Comprehensive Income

Comprehensive income includes all the unrealizedand net income. It provides an overview of the company's income that is not fully reported on the income statement.

02

Preparing a statement of comprehensive income using one statement format

Roxanne Carter Corporation
Statement of Comprehensive Income
For the Year Ended 2017

Sales

$1,200,000

Cost of goods sold

750,000

Gross Profits

450,000

Selling and Distribution expenses

320,000

Net Income

130,000

Other Comprehensive Income

Unrealized holding Gains

18,000

Comprehensive Income

$148,000

03

Preparing the Income Statement using two statement format

Roxanne Carter Corporation
Income Statement
For the Year Ended 2017

Sales

$1,200,000

Cost of goods sold

750,000

Gross Profit

450,000

Selling and Distribution Expenses

320,000

Net Income

$130,000

Roxanne Carter Corporation
Statement of Comprehensive Income
For the Year Ended 2017


Net Income

$130,000

Unrealized holding Gain

18,000

Comprehensive Income

$148,000

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Most popular questions from this chapter

Discuss the appropriate treatment in the income statement for the following items:

(a) Loss on discontinued operations.

(b) Non-controlling interest allocation.

(c) Earnings per share.

(d) Gain on sale of equipment.

The non-controlling interest section of the income statement is:

(a) required under GAAP but not under IFRS.

(b) required under IFRS but not under GAAP.

(c) required under IFRS and GAAP.

(d) not reported under GAAP or IFRS.

Discuss the appropriate treatment in the income statement for the following items:

(a) Loss on discontinued operations.

(b) Non-controlling interest allocation.

Presented below are certain account balances of Paczki Products Co.

Rent revenue \(6,500 Sales discounts \)7,800

Interest expense \(12,700 Selling expenses \)99,400

Beginning retained earnings \(114,400 Sales revenue \)390,000

Ending retained earnings \(125,000Income tax expense \)31,000

Dividend revenue \(71,000Cost of goods sold \)184,000

Sales returns and allowances \(12,400Administrative expenses \)82,500

Allocation to non controlling interest $17,000

Instructions

From the foregoing, compute the following: (a) total net revenue, (b) net income, (c) dividends declared, and (d) income attributable to controlling stockholders.

Presented below are changes in all the account balances of Fritz Mayhew Furniture Co. during the current year, except for retained earnings.

Increase Increase

(Decrease) (Decrease)

Cash \(79,000 Accounts Payable

Accounts Receivable (net) \)45,000 Bonds Payable \(82,000

Inventory \)127,000 Common Stock \(125,000

Investments (47,000) Paid-In Capital in Excess of Par \)13,000

Instructions

Compute the net income for the current year, assuming that there were no entries in the Retained Earnings account except for net income and a dividend declaration of $19,000 which was paid in the current year.

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