Duke Company\'s records show the following account balances at December 31, 2018

Question

Duke Company's records show the following account balances at December 31, 2018: Sales Cost of goods sold General and administrative expenses Selling expenses Interest expense $16,600,000 9,800,000 1,080,000 580,000 780,000 ncome tax expense has not yet been determined. The following events also occurred during 2018. All transactions are material in amount. 1. $380,000 in restructuring costs were incurred in connection with plant closings. 2. Inventory costing $480,000 was written off as obsolete. Material losses of this type are considered to be unusual 3. It was discovered that depreciation expense for 2017 was understated by $58,000 due to a mathematical error. 4. The company experienced a negative foreign currency translation adjustment of $280,000 and had unrealized gains on investments of $260,000. Required: Prepare a single, continuous multiple-step statement of comprehensive income for 2018. The company's effective tax rate on all items affecting comprehensive income is 20%. Each component of other comprehensive income should be displayed net of tax. Ignore EPS disclosures. (Amounts to be deducted should be indicated with a minus sign.)

Explanation / Answer

DUKE COMPANY Statement of Comprehensive Income For the Year Ended December 31,2018 Sales revenue 16600000 Cost of goods sold -9800000 Gross profit 6800000 Operating expenses: General and administrative expenses 1080000 Selling expenses   580000 Restructuring costs 380000 Loss from write-down of obsolete inventory 480000 Total operating expenses 2520000 Other income (expense): Interest expense 780000 Income before income taxes 3500000 Income tax expense 700000 Other comprehensive income (loss): Foreign currency translation adjustment loss, net of tax -224000 Total other comprehensive loss -224000 Comprehensive income 2576000

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