Question

The following income statement items appeared on the adjusted trial balance of Schembri Manufacturing Corporation for the year ended December 31, 2021 ($ in thousands): sales revenue, $16,500; cost of goods sold, $6,800; selling expenses, $1,360; general and administrative expenses, $860; interest revenue, $120; interest expense, $240. Income taxes have not yet been recorded. The company's income tax rate is 25% on all items of income or loss. These revenue and expense items appear in the company's income statement every year. The company's controller, however, has asked for your help in determining the appropriate treatment of the following nonrecurring transactions that also occurred during 2021($ in thousands). All transactions are material in amount. 1. Investments were sold during the year at a loss of $280. Schembri also had an unrealized gain of $400 for the year on investments in debt securities that qualify as components of comprehensive income. 2. One of the company's factories was closed during the year. Restructuring costs incurred were $1,800. 3. During the year, Schembri completed the sale of one of its operating divisions that qualifies as a component of the entity according to GAAP. The division had incurred a loss from operations of $620 in 2021 prior to the sale, and its assets were sold at a gain of $1,520. 4. In 2021, the company's accountant discovered that depreciation expense in 2020 for the office building was understated by $260. 5. Negative foreign currency translation adjustment for the year totaled $320. Required: 1. Prepare Schembri's single, continuous multiple-step statement of comprehensive income for 2021, including earnings per share disclosures. One million shares of common stock were outstanding at the beginning of the year and an additional 400,000 shares were issued on July 1, 2021 2. Prepare a separate statement of comprehensive income for 2021. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare Schembri's single, continuous multiple-step statement of comprehensive income for 2021, including earnings per share disclosures. One million shares of common stock were outstanding at the beginning of the year and an additional 400,000 shares were issued on July 1, 2021. (Amounts to be deducted should be indicated with a minus sign. Enter your answers in thousands. Round EPS answers to 2 decimal places.) Show less SCHEMBRI MANUFACTURING CORPORATION Statement of Comprehensive Income For the Year Ended December 31, 2021 (5 in 000 s) Pray 1 of 1 !!! Next

Answer 1

SCHEMBRI MANUFACTURING CORPORATION
Statement of Comprehensive income
For the year ended December 31,2021
($ in 000s)
Sales revenue		16,500
Cost of goods sold		(6,800)
Gross profit		9,700
Operating expenses
Selling expenses	(1,360)
General and administrative expenses	(860)
Restructuring costs	(1,800)
Total operating expenses		(4,020)
operating income		5,680
other income(expense) :
Interest expense	(240)
loss on sale of investments	(280)
interest revenue	120
Other income, net		(400)
Income from continuing operations before income taxes		5,280
Income tax expense (5,280 *25%)		1,320
Income from continuing operations		3,960
Discontinued operations:
Income from operations of discontinued component ($ 1,520 - $ 620)	900
Income tax expense ($ 900 * 25%)	(225)
Income of discontinued operations		675
Net income		4,635
Other comprehensive income, net of tax :
Unrealised gain from investments ($400-25%)	300
Loss from Foreign currency translation adjustment ($320-25%)	(240)	60
Comprehensive income		4,695
Earnings per share:
income from continuing operations		3.9125
income from discontinued operations		0.5625

Note:-

Weighted average share = 1,000,000+(400,000/2) = 1,200,000

Net income from continue operation = 4,695/1200 = 3.9125

Net income from discontinued operation = 675/1200 = 0.5625

Part 2:-

SCHEMBRI MANUFACTURING CORPORATION
Statement of comprehensive income
For the year ended December 31,2021($ 000)
Net income		4,635
Other comprehensive income (loss)
Unrealized gain from investment , net of tax [400*(1-25%)]	300
Loss from foreign currency translation, net of tax [320*(1-25%)]	(240)
Total other comprehensive income		60
Comprehensive income		$4,695