Duke Company’s records show the following account balances at December 31, 2021:         Sales revenue $ 18,600,000 Cost of goods sold   10,800,000 General and administrative expense   1,180,000 Selling expense   680,000 Interest expense   880,000     Income tax expense has not yet been determined. The following events also occurred during 2021. All transactions are material in amount.   $480,000 in restructuring costs were incurred in connection with plant closings. Inventory costing $580,000 was written off as obsolete. Material losses of this type are considered to be unusual. It was discovered that depreciation expense for 2020 was understated by $68,000 due to a mathematical error. The company experienced a negative foreign currency translation adjustment of $380,000 and had an unrealized gain on debt securities of $360,000.   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 not attempted   not attempted not attempted   not attempted Gross profit   0 Operating expenses:     not attempted not attempted   not attempted not attempted   not attempted not attempted   not attempted not attempted   not attempted not attempted   not attempted not attempted   Total operating expenses   0 Operating income   0 Other income (expense):     not attempted not attempted not attempted not attempted not attempted not attempted Income before income taxes   0 not attempted   not attempted Net income   0 Other comprehensive income, net of tax:     not attempted not attempted   not attempted not attempted   Total other comprehensive income (loss)   0 Comprehensive income   $0

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Duke Company’s records show the following account balances at December 31, 2021:
 

     
Sales revenue $ 18,600,000
Cost of goods sold   10,800,000
General and administrative expense   1,180,000
Selling expense   680,000
Interest expense   880,000
 

 
Income tax expense has not yet been determined. The following events also occurred during 2021. All transactions are material in amount.
 

  1. $480,000 in restructuring costs were incurred in connection with plant closings.
  2. Inventory costing $580,000 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 $68,000 due to a mathematical error.
  4. The company experienced a negative foreign currency translation adjustment of $380,000 and had an unrealized gain on debt securities of $360,000.

 
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
not attempted   not attempted
not attempted   not attempted
Gross profit   0
Operating expenses:    
not attempted not attempted  
not attempted not attempted  
not attempted not attempted  
not attempted not attempted  
not attempted not attempted  
not attempted not attempted  
Total operating expenses   0
Operating income   0
Other income (expense):    
not attempted not attempted not attempted
not attempted not attempted not attempted
Income before income taxes   0
not attempted   not attempted
Net income   0
Other comprehensive income, net of tax:    
not attempted not attempted  
not attempted not attempted  
Total other comprehensive income (loss)   0
Comprehensive income   $0
Expert Solution
Step 1

Solution:-

Preparation of a single, continuous multiple-step statement of comprehensive income for 2021 as follows:-

Notes:-

Income tax rate is 25%

Foreign currency Translation Adjustment Loss $380,000 x (1-Tax) = -$285,000

Unrealized gain on debt securities of $360,000 x (1-Tax) = $270,000

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