15E - Intermediate Accounting (Kieso)

Question

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.)

Step-by-Step Solution

Answer

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

Meaning of Comprehensive Income

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

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

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