Trayer Corporation has income from continuing operations of $298,000 for the yea

Question

Trayer Corporation has income from continuing operations of $298,000 for the year ended December 31, 2017. It also has the following items (before considering income taxes).

Assume all items are subject to income taxes at a 21% tax rate.

(a)

Prepare an income statement, beginning with income from continuing operations.

1. An unrealized loss of $72,000 on available-for-sale securities 2. A gain of $33,000 on the discontinuance of a division (comprised of a $13,000 loss from operations and a $46,000 gain on disposal). 3. A correction of an error in last year’s financial statements that resulted in a $29,000 understatement of 2016 net income. TRAYER CORPORATION Partial Statement of Comprehensive Income

Explanation / Answer

ans Partial Statement of Comprehensive Income For the year ended December 31 2017 Income from Continuing Opertaions $298,000 Discontinured Operations Loss from operation (net of taxes 13000*79%) -10270 Gain from operation (net of taxes 46000*79%) 36340 Net Income $324,070 Other Comprehensive Income Unrealized holding loss of Available for sale securities -72000 Comprehensive Income $252,070 note: correction of error in last year statement for understatement of income is needed to be added to the Retained Earning account hence it is presented on Retained earnings statement If any doubt please comment

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