Question

Duke Company's records show the following account balances at December 31, 2021: Sales revenue Cost of goods sold General and administrative expense Selling expense Interest expense $15, 8ee, eee 9,480, eee 1,040, eee 540,000 740, eee Income tax expense has not yet been determined. The following events also occurred during 2021. All transactions are material in amount 1. $340,000 in restructuring costs were incurred in connection with plant closings. 2. Inventory costing $440,000 was written off as obsolete. Material losses of this type are considered to be unusual 3. It was discovered that depreciation expense for 2020 was understated by $54,000 due to a mathematical error. 4. The company experienced a negative foreign currency translation adjustment of $240,000 and had an unrealized gain on debt securities of $220,000 Required: Prepare a single, continuous multiple-step statement of comprehensive income for 2021. The company's effective tax rate on all items affecting comprehensive income is 25%. Each component of other comprehensive income should be displayed net of tax. Ignore EPS disclosures. (Amounts to be deducted should be indicated with a minus sign.)

Answer 1

Please find below table useful to compute desired results: -

Req. =B2 =B3 =F4-F5 1=B7 BC D Ε 1 Particulars Given DUKE COMPANY 2 Sales Revenue 15800000 Statement of Comprehensive Income 3 Cost of Goods sold 9400000 For the Year Ended December 31, 2021 4 General and Administrative Expense 1040000 Sales Revenue 5 Selling Expense 540000 Cost of Goods Sold 6 Interest Expense 740000 Gross Profit 7 Restructuring costs 340000 Operating Expenses 8 Written off Inventory 440000 Selling Expenses =B5 9 Understated depreciation Expense 54000 Administrative Expenses =B4 10 Foreign Currency Translation adjustment 240000 Restructuring Cost 11 Unrealized gain on debt securities 220000 Loss from written off Inventory =B8 12 Tax Rate =25/100 Total Operating Expenses Operating Income Other Income (Expenses) Interest Expense Income Before Taxes Income Tax Expenses Net Income Other Comprehensive Income(loss), Net of Tax Foreign Currency Transaction adjustment, net of tax |=-B10*(1-B12) Unrealized Gains =B11*(1-B12) Total other comprehensive Income(loss) Total Comprehensive Income =SUMES:E11) =F6-F12 =B6 =F13-F15 =F16*B12 =F16-F17 =E20+E21 =F18+F22

End results would be as follows: -

Req. A Particulars Given 2 Sales Revenue 3 Cost of Goods sold 4 General and Administrative Expense 5 Selling Expense 6 Interest Expense 7 Restructuring costs 8 Written off Inventory 9 Understated depreciation Expense 10 Foreign Currency Translation adjustment 11 Unrealized gain on debt securities 12 Tax Rate 15.800.000 9,400,000 6.400,000 15.800.000 9,400,000 1,040,000 540.000 740.000 340,000 440,000 54.000 240.000 220,000 25% D Ε DUKE COMPANY Statement of Comprehensive Income For the Year Ended December 31, 2021 Sales Revenue Cost of Goods Sold Gross Profit Operating Expenses Selling Expenses 540,000 Administrative Expenses 1,040,000 Restructuring Cost 340.000 Loss from written off Inventory 440,000 Total Operating Expenses Operating Income Other Income (Expenses) Interest Expense Income Before Taxes Income Tax Expenses Net Income Other Comprehensive Income(loss), Net of Tax Foreign Currency Transaction adjustment, net of tax | (180,000) Unrealized Gains 165.000 Total other comprehensive Income(loss) Total Comprehensive Income 2,360,000 4,040,000 13 740.000 3,300,000 825,000 2.475,000 (15,000) 2.460.000