Question

Trayer Corporation has income from continuing operations of $325,000 for the year ended December 31, 2017. It also has the following items (before considering income taxes). 1. An unrealized loss of $70,900 on available for sale securities. Again of $23,200 on the discontinuance of a division (comprised of a $7,500 loss from operations and a $30,700 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.

Answer 1

Answer:

Indigo Corporation

Partial Statement of Comprehensive Income

For the Year Ended December 31, 2017 (Amounts in $)

Income from Continuing Operations		325,000
Discontinued Operations
Loss from Operations [$7500*(1-18%)] (after tax)	(6150)
Gain from Disposal [$30700*(1-18%)] (after tax)	25174
		19,024
Net Income/(Loss) (A)		344,024
Other Comprehensive Income
Unrealized holding loss of Available-for-Sale Securities [$70900*(1-18%)] (after tax) (B)		(58,138)
Comprehensive Income (A-B)		285,886

Working Notes:-

1) All the amounts of gains and losses in other comprehensive income is calculated after deducting income tax at the rate of 18%.

2) Error correction has already included in income from continuing operations therefore not shown in other comprehensive income above.