Comprehensive Income) Willie Nelson, Jr., controller for Jenkins Corporation, is preparing the company's financial statements at year-end. Currently, he is focusing on the income statement and determining the format for reporting comprehensive income. During the year, the company earned net income of $400,000 and had unrealized gains on available-for-sale securities of $15,000. In the previous year, net income was $410,000, and the company had no unrealized gains or losses. Instructions:    (a)  Show how income and comprehensive income will be reported on a comparative basis for the current and prior years, using the two statement format. (b) Show how income and comprehensive income will be reported on a comparative basis for the current and prior years, using the one statement format.   (c)  Which format should Nelson recommend?

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Chapter1: Financial Statements And Business Decisions
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CA4-7.  

(Comprehensive Income)

Willie Nelson, Jr., controller for Jenkins Corporation, is preparing the company's financial statements at year-end. Currently, he is focusing on the income statement and determining the format for reporting comprehensive income. During the year, the company earned net income of $400,000 and had unrealized gains on available-for-sale securities of $15,000. In the previous year, net income was $410,000, and the company had no unrealized gains or losses.

Instructions: 
 
(a)  Show how income and comprehensive income will be reported on a comparative basis for the current and prior years, using the two statement format.

(b) Show how income and comprehensive income will be reported on a comparative basis for the current and prior years, using the one statement format.
 
(c)  Which format should Nelson recommend?
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