Intermediate Accounting
3rd Edition
ISBN: 9780136912644
Author: Elizabeth A. Gordon; Jana S. Raedy; Alexander J. Sannella
Publisher: Pearson Education (US)
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Textbook Question
Chapter 5, Problem 5.8P
Statement of Comprehensive Income Single-and Two-Statement Approaches. Tortarella Timber Company provided the following information for the current year
- 1. Operating income amounted to $345,000
- 2. The company sold investments in bonds at a pre-tax loss of $23,500
- 3. Tortarella reported a $5,600 unrealized loss on an available-for-sale portfolio that is included in other comprehensive income.
- 4. The company reported a $12,000 unrealized gam on its trading portfolio, which is included in net income
- 5. Tortarella committed to discontinue its retail lumber stores division on January 1 of the current year The retail lumber stores meet the criteria to be presented as a discontinued operation The retail lumber stores accounted for 15% of the company’s operating income. The stores were operated all year.
- 6. The retail lumber stores division was sold at December 31 of the current year for a $16,850 pre-tax loss. There was no gain or loss on remeasurement on January 1.
The company is subject to a 30% income tax rate.
Required
- a. Prepare a single statement of comprehensive income beginning with operating income.
- b. Prepare separate statements of net income and comprehensive income.
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Reporting a Comprehensive Income Statement
Wagner Inc. has service revenue of $1,200,000, operating expenses of $720,000, and an unrealized holding loss of $60,000 on debt security investments for the year ended December 31. Its income tax rate is 25%.
Required
a. Prepare a single continuous statement of comprehensive income. Ignore earnings per share disclosures.
• Do not use negative signs with any of your answers.
Wagner Inc.
Statement of Comprehensive Income
For the Year Ended December 31
Service revenue
Operating expenses
Income before income tax
Income tax expense
Net income
Unrealized holding loss on security investments, net of tax
Wagner Inc.
Income Statement
For the Year Ended December 31
Service revenue
Operating expenses
Income before income tax
Net income
+
+
Wagner Inc.
Statement of Comprehensive Income
For the Year Ended December 31
Unrealized holding loss on security investments, net of tax
Income before income tax
Comprehensive income
+
+ $
$
+
+
b. Prepare two…
The most recent financial statements for Anderson Company are shown here:
Income Statement
Balance Sheet
Sales
Costs
$ 58,800
Current
assets
$ 28,800
24,800
Fixed assets
123,000
Long-term
debt
Equity
$ 62,600
89,200
Taxable income
$ 34,000
Total
$151,800
Total
$151,800
Taxes (21%)
7,140
Net income
$ 26,860
Assets and costs are proportional to sales. Long-term debt and equity are not. The
company maintains a constant 30 percent dividend payout ratio and a constant debt-
equity ratio.
What is the maximum increase in sales that can be sustained assuming no new equity is
issued? (Do not round intermediate calculations and round your answer to 2 decimal
places, e.g., 32.16.)
Maximum increase in sales
Mellville Corporation provided the following partial-trial balance for the current yearPrepare a single-step income statement for the year ended December 31.
Melville is subject to a 40% income tax rate
Melville Corporation
Trial Balance (Selected Accounts)
For the Year Ended December 31
Account
Debit
Credit
Dividends
$1,400
Sales
$120,000
Dividend Income
590
Interest Income
900
Gain on Disposal of Plant Assets
1,100
Unrealized Gain on Trading Investments
1,700
Cost of Goods Sold
45,000
Office Supplies Expense
4,100
Sales Salaries Expense
3,300
Selling Expenses
15,000
Accounting and Legal Fees—General Expense
830
Advertising Expense
3,800
Office Salaries Expense
6,600
Depreciation Expense—General Expense
9,400
Interest Expense
2,200
Loss on Asset Impairment
2,400
Revenue and Gains…
Chapter 5 Solutions
Intermediate Accounting
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Ch. 5 - What are the six key items to be reported on the...Ch. 5 - Explain why operating income is an important...Ch. 5 - Prob. 5.13QCh. 5 - Prob. 5.14QCh. 5 - What items are included in net income?Ch. 5 - Are items of other comprehensive income included...Ch. 5 - What two choices must companies make when...Ch. 5 - Prob. 5.18QCh. 5 - Prob. 5.19QCh. 5 - Are companies reporting under U.S. GAAP required...Ch. 5 - What accounts are summarized on the statement of...Ch. 5 - What is financial statement analysis?Ch. 5 - Prob. 5.23QCh. 5 - What are comparative financial statements and why...Ch. 5 - What is the difference between vertical and...Ch. 5 - Prob. 5.26QCh. 5 - Explain the difference between return on equity...Ch. 5 - How is a companys profit margin calculated?Ch. 5 - Prob. 5.1MCCh. 5 - Moore Furniture Inc., a public company, has...Ch. 5 - Beach and Poole, CPA is reviewing income statement...Ch. 5 - Prob. 5.4MCCh. 5 - Allison Corporations current year income from...Ch. 5 - Prob. 5.6MCCh. 5 - Chili Co. had the following balances at December...Ch. 5 - Szuba Corporation reported the following...Ch. 5 - Prob. 5.9MCCh. 5 - Prob. 5.1BECh. 5 - Prob. 5.2BECh. 5 - Advantages and Disadvantages of the Income...Ch. 5 - Identify each of the earnings items as primarily...Ch. 5 - Income Statement Presentation. Place the...Ch. 5 - Statement of Net Income Presentation, IFRS. Which...Ch. 5 - Single-Step Statement of Net Income. Carr...Ch. 5 - Statement of Net Income, IFRS. Using the...Ch. 5 - Multiple-Step Statement of Net Income. Using the...Ch. 5 - Condensed Statement of Net Income. Using the...Ch. 5 - Prob. 5.11BECh. 5 - Prob. 5.12BECh. 5 - Discontinued Operations. Jojo, Inc. held a...Ch. 5 - Prob. 5.14BECh. 5 - Prob. 5.15BECh. 5 - Prob. 5.16BECh. 5 - Computation of Retained Earnings. Taxi Cabs, Inc...Ch. 5 - Computation of Contributed Capital. Using the...Ch. 5 - Prob. 5.19BECh. 5 - Prob. 5.20BECh. 5 - Prob. 5.21BECh. 5 - Ratio Analyses. Green Grasshopper Incorporated is...Ch. 5 - Multiple-Step and Single-Step Statements of Net...Ch. 5 - Condensed Statement of Net Income. Using the trial...Ch. 5 - Prob. 5.3ECh. 5 - Prob. 5.4ECh. 5 - Multiple-step Statement of Net Income. The current...Ch. 5 - Condensed Statement of Net Income. Using the...Ch. 5 - Multiple-step income Statement. Ciara s Cookie...Ch. 5 - Prob. 5.8ECh. 5 - Prepare Statement of Stockholders' Equity. Dane...Ch. 5 - Prepare Statement of Stockholders Equity. Ciaras...Ch. 5 - Prepare a Statement of Stockholders' Equity....Ch. 5 - Profitability Analyses. Use the following excerpt...Ch. 5 - Multiple-Step and Single-Step income Statement,...Ch. 5 - Condensed Income Statement. Using the information...Ch. 5 - Multiple-step, Single-step, and Condensed...Ch. 5 - Statement of Net Income Presentation. IFRS....Ch. 5 - Income Statement Presentation, Classification, and...Ch. 5 - Prob. 5.6PCh. 5 - Multiple-step, Single-step, and Condensed...Ch. 5 - Statement of Comprehensive Income Single-and...Ch. 5 - Prepare Statement of Stockholders Equity. Use the...Ch. 5 - Prob. 5.10PCh. 5 - Prob. 1JCCh. 5 - Prob. 1FSCCh. 5 - Prob. 2FSCCh. 5 - Prob. 1SSCCh. 5 - Surfing the Standards Case 2: Amounts Paid by...Ch. 5 - Prob. 1BCCCh. 5 - Prob. 2BCC
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