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 15 Sales Cost of goods sold General and administrative expenses Selling expenses Interest expense $16,800,000 9,900,000 1,090,000 590,000 790,000 4.16 points Print Income tax expense has not yet been determined. The following events also occurred during 2018. All transactions are material in amount 1. $390,000 In restructuring costs were incurred in connection with plant closings. 2. Inventory costing $490,000 was written off as obsolete. Material losses of this type are considered to be unusual 3. It was discovered that depreclation expense for 2017 was understated by $59,000 due to a mathematical error 4. The company experienced a negative foreign currency translation adjustment of $290,000 and had unrealized gains on Investments of $270,000. 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 30%. Each component of other comprehensive income should belasplayed net of tax Ignore EPS disclosures. (Amounts to be deducted should be Indicated with a minus sign.) DUKE COMPANY K Prev 15 of 24 Next >

Explanation / Answer

Sales revenue                                                $16,800,000
Cost of good sold                                             (9,900,000)
GROSS PROFIT                                                 $69,00,000
OPERATING EXPENSE
General and administrative
                     Expense                $1,090,000
Selling expense                         $5,90,000
Restructuring cost                   $3,90,000
Inventory written off              $4,90,000
TOTAL OPERATING COST                                   $(25,60,000)
INCOME FROM OPERATION                                $ 43,40,000
Other income(expense)
     Interest expense                                          $(7,90,000)
Income before income taxes                             $35,50,000
Tax expense(30%)                                               $(10,65,000)
Net income                                                           $24,85,000
Other comprehensive income(loss)
   Foreign currency translation
   Adjustment loss (net of tax of $87000) $(2,03,000)
Unrealized gain on investment
   (Net of tax $81,000)                                  $ 1,89,000
Total comprehensive loss                              $ (14000)
COMPREHENSIVE INCOME                               $24,71,000


Notes- minus sign is represented by ()
Depreciation is prior period adjustment.hence no effect in 2018

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