Exercises 13-2 Trayer Corporation has income from continuing operations of $219,

Question

Exercises 13-2 Trayer Corporation has income from continuing operations of $219,000 for the year ended December 31, 2017. It also has the following items (before considering income taxes) 1. An unrealized loss of $72,600 on available-for-sale securities. 2. A gain of $27,600 on the discontinuance of a division (comprised of a $6,400 loss from operations and a $34,000 gain on disposal) 3. A correction of an error in last year's financial statements that resulted in a $20,000 understatement of 2016 net income Assume all items are subject to income taxes at a 15% tax rate. Prepare a statement of comprehensive income, beginning with income from continuing operations. MARIGOLD CORP Partial Statement of Comprehensive Income Click if you would like to Show Work for this question: Open Show Work

Explanation / Answer

MARIGOLD CORP.

Partial statement of comprehensive income

for the year ended December 31, 2017 (Amount in $)

All the gians and losses are shown after an income tax saving of 15%.

Income from continuing Operations (after tax) [219,000*(1-.15)] 186,150 Add:Income from Discontinued Operations Gain on Disposal (after tax) (34,000*85%) 28,900 Loss from discontinued operations (6,400*85%) (5,440) 23,460 Income before extraordinary item 209,610 Less: Unrealized loss on securities (72,600*85%) (61,710) Income before Prior Period Adjustments 147,900 Add: Prior Period Income (20,000*85%) 17,000 Net Income 164,900

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