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 $15,200,000 9,100,000 1,010,000 510,000 710,000 Income tax expense has not yet been determined. The following events also occurred during 2021. All transactions are material in amount 1. $310,000 in restructuring costs were incurred in connection with plant closings, 2. Inventory costing $410,000 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 $51,000 due to a mathematical error. 4. The company experienced a negative foreign currency translation adjustment of $210,000 and had an unrealized gain on debt securities of $190,000 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.) DUKE COMPANY Statement of Comprehensive Income For the Year Ended December 31, 2021 Sales revenue $ 15,200,000

Answer 1

DUKE COMPANY
Statement of Comprehensive Income
For the Year Ended December 31, 2021
Sales revenue ..................................................................		$15,200,000
Cost of goods sold ..........................................................		9,100,000
Gross profit .....................................................................		6,100,000
Operating expenses:
General and administrative expense ............................	$1,010,000
Selling expense ...........................................................	510,000
Restructuring costs ......................................................	310,000
Loss on inventory write-down .....................................	410,000
Total operating expenses ...........................................		2,240,000
Operating income ............................................................		3,860,000
Other income (expense):
Interest expense ...........................................................		(710,000)
Income before income taxes............................................		3,150,000
Income tax expense ........................................................		787,500
Net income .....................................................................		2,362,500
Other comprehensive income, net of tax:
Foreign currency translation adjustment………………	(157,500)
Gain on debt securities .................................................	142,500
Total other comprehensive income (loss) ..................		(15,000)
Comprehensive income ...................................................		$ 2,347,500