Question

Exercise 18-02

Trayer Corporation has income from continuing operations of $256,000 for the year ended December 31, 2020. It also has the following items (before considering income taxes).

1.		An unrealized loss of $86,000 on available-for-sale securities.
2.		A gain of $32,000 on the discontinuance of a division (comprised of a $18,000 loss from operations and a $50,000 gain on disposal).

Assume all items are subject to income taxes at a 25% tax rate.

Prepare a statement of comprehensive income, beginning with income from continuing operations. (Enter loss using either a negative sign preceding the number e.g. -2,945 or parentheses e.g. (2,945).)

TRAYER CORPORATION Partial Statement of Comprehensive Income December 31, 2020For the Quarter Ended December 31, 2020For the Year Ended December 31, 2020
Discontinued OperationsDividendsExpensesUnrealized Holding Loss on Available-for-Sale SecuritiesExtraordinary LossGain from Disposal, Net of Income TaxesLoss from Operations, Net of Income Tax SavingsIncome from Continuing OperationsIncome Tax ExpenseLoss from Operations of Music DivisionComprehensive Income / (Loss)Retained EarningsTotal ExpensesUnrealized Holding Gain on Available-for-Sale SecuritiesLoss from Disposal of Discontinued DivisionGain from Operations of Discontinued DivisionNet Income / (Loss)Other Comprehensive Income				$
Discontinued OperationsDividendsExpensesUnrealized Holding Loss on Available-for-Sale SecuritiesExtraordinary LossGain from Disposal, Net of Income TaxesLoss from Operations, Net of Income Tax SavingsIncome from Continuing OperationsIncome Tax ExpenseLoss from Operations of Music DivisionComprehensive Income / (Loss)Retained EarningsTotal ExpensesUnrealized Holding Gain on Available-for-Sale SecuritiesLoss from Disposal of Discontinued DivisionGain from Operations of Discontinued DivisionNet Income / (Loss)Other Comprehensive Income
Discontinued Operations    Dividends    Expenses    Unrealized Holding Loss on Available-for-Sale Securities    Extraordinary Loss    Gain from Disposal, Net of Income Taxes    Loss from Operations, Net of Income Tax Savings    Income from Continuing Operations    Income Tax Expense    Loss from Operations of Music Division    Comprehensive Income / (Loss)    Retained Earnings    Total Expenses    Unrealized Holding Gain on Available-for-Sale Securities    Loss from Disposal of Discontinued Division    Gain from Operations of Discontinued Division    Net Income / (Loss)    Other Comprehensive Income		$
Discontinued Operations    Dividends    Expenses    Unrealized Holding Loss on Available-for-Sale Securities    Extraordinary Loss    Gain from Disposal, Net of Income Taxes    Loss from Operations, Net of Income Tax Savings    Income from Continuing Operations    Income Tax Expense    Loss from Operations of Music Division    Comprehensive Income / (Loss)    Retained Earnings    Total Expenses    Unrealized Holding Gain on Available-for-Sale Securities    Loss from Disposal of Discontinued Division    Gain from Operations of Discontinued Division    Net Income / (Loss)    Other Comprehensive Income
Discontinued OperationsDividendsExpensesUnrealized Holding Loss on Available-for-Sale SecuritiesExtraordinary LossGain from Disposal, Net of Income TaxesLoss from Operations, Net of Income Tax SavingsIncome from Continuing OperationsIncome Tax ExpenseLoss from Operations of Music DivisionComprehensive Income / (Loss)Retained EarningsTotal ExpensesUnrealized Holding Gain on Available-for-Sale SecuritiesLoss from Disposal of Discontinued DivisionGain from Operations of Discontinued DivisionNet Income / (Loss)Other Comprehensive Income				$
Discontinued OperationsDividendsExpensesUnrealized Holding Loss on Available-for-Sale SecuritiesExtraordinary LossGain from Disposal, Net of Income TaxesLoss from Operations, Net of Income Tax SavingsIncome from Continuing OperationsIncome Tax ExpenseLoss from Operations of Music DivisionComprehensive Income / (Loss)Retained EarningsTotal ExpensesUnrealized Holding Gain on Available-for-Sale SecuritiesLoss from Disposal of Discontinued DivisionGain from Operations of Discontinued DivisionNet Income / (Loss)Other Comprehensive Income
Discontinued Operations    Dividends    Expenses    Unrealized Holding Loss on Available-for-Sale Securities    Extraordinary Loss    Gain from Disposal, Net of Income Taxes    Loss from Operations, Net of Income Tax Savings    Income from Continuing Operations    Income Tax Expense    Loss from Operations of Music Division    Comprehensive Income / (Loss)    Retained Earnings    Total Expenses    Unrealized Holding Gain on Available-for-Sale Securities    Loss from Disposal of Discontinued Division    Gain from Operations of Discontinued Division    Net Income / (Loss)    Other Comprehensive Income
Discontinued OperationsDividendsExpensesUnrealized Holding Loss on Available-for-Sale SecuritiesExtraordinary LossGain from Disposal, Net of Income TaxesLoss from Operations, Net of Income Tax SavingsIncome from Continuing OperationsIncome Tax ExpenseLoss from Operations of Music DivisionComprehensive Income / (Loss)Retained EarningsTotal ExpensesUnrealized Holding Gain on Available-for-Sale SecuritiesLoss from Disposal of Discontinued DivisionGain from Operations of Discontinued DivisionNet Income / (Loss)Other Comprehensive Income				$

Answer 1

Statement of comprehensive income

Income from continuing operations		256000
Discontinued operations
Loss from operation, net of income tax savings (18000*75%)	-13500
Gain from disposal, Net of income tax (50000*75%)	37500
		24000
Net income		280000
Unrealized loss on available for sale securities (86000*75)		-64500
Comprehensive income		215500