Exercise 18-1 (Algo) Comprehensive Income [LO18-2] The following is from the 2024 annual report of Kaufman Chemicals, Incorporated: Years Ended December 31 Statements of Comprehensive Income Net income 2024 $ 878 2023 2022 $ 708 $ 563 Other comprehensive income: Change in net unrealized gains on AFS investments, net of tax of $20, ($18), and $18 in 2024, 2023, and 2022, respectively 33 (2) (26) 25 (1) $ 909 $681 Other Total comprehensive income $ 589 Kaufman reports accumulated other comprehensive income in its balance sheet as a component of shareholders' equity as follows: ($ in millions) Shareholders' equity: Common stock Additional paid-in capital Retained earnings Accumulated other comprehensive income Total shareholders' equity 2024 2023 $ 340 $340 8,373 8,373 7,453 107 $ 16,273 6,897 76 $ 15,686 Required: 3. From the information provided, determine how Kaufman calculated the $107 million accumulated other comprehensive income in 2024. Note: Negative amount should be indicated by a minus sign. Enter your answers in millions (l.e., 10,000,000 should be entered as 10). Accumulated other comprehensive income, 2023 Change in net unrealized gains on investments Change in "other" ($ in millions) Accumulated other comprehensive income, 2024 $

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Deferred Tax

Deferred tax is an estimated future tax which is made while preparing accounts. It is estimated as a result of past and present transactions in the financial statements. It is not the actual tax which needs to be paid or refundable from the revenue authority, it is an accounting entry. It exists because of the difference between accounting profits and taxable profits.