Question i The following is from the statement of shareholders\' equity for Inte

Question

Question i The following is from the statement of shareholders' equity for Intel Corporation for 2015 (rn millions of dollars). Intel faces a 38% tax rate. Balance, December 25, 2014 Net income Unrealized loss on available-for-sale securities Issuance of shares through employee stock plans, net of tax benefit of S887 million Reclassification of put warrant obligation 32,535 10,535 (3,596) 1,684 130 26 207 Conversion of subordinated notes to common stock (market value of stock was $350 million) Repurchase of common stock Cash dividends Issuance of shares for acquisitions (4,007) (470) 278 37.322 Calculate comprehensive income to Intel's shareholders for 2015, being sure to include any hidden dirty suphus expenses.

Explanation / Answer

STEP1:- Adjustments to be made to arrive comprehensive income to share holders.

particulars   amount

   Net Income 10,535 (given)

add:   

1.Issuance of shares through

employee stock option(note1) 2571

2.Reclassification adjustment

of put warrant (Note 2) 130

3.Amortization of unearned

compensation (note 1) 26

4. Issuance of shares for

acquisition (note 1) 278 3005   

13540

less:

1.  Unrealised loss on available for

sale securities (note 1) 3596

2.Loss on conversion of sub ordinate

notes to commonstock (note 1) 143

3.Repurchase of common stocks (note 1) 4007

4. Cash dividend (note 1) 470 8216

Comprehensive income   5324

Note:

1.The owner's business interest can be measured through comprehensive income.It is nothing but the change in owners equity.

Comprehensive income = net income + other comprehensive income

The items which wont be considered in determining net income are considered in comprehensive income which includes unrealised gain or loss due to hedging ; gain or loss due to foreign currency fluctuations ; issue of stock ; buy back of stock; payment of dividend as all these items leads to change in equity.Simply the item which effects the net assets of the entity it comes under comprehensive income. Net income consists of income; expenses; losses and gains in real terms.

2.Reclassification adjustments are amounts which are reclassified to profit or loss statement in the current period that are recognised in other comprehensive income in the current or previous periods.

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