Kindly help me solve part 4.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Kindly help me solve part 4.
![E 18-1
Comprehensive
The following is from the 2018 annual report of Kaufman Chemicals, Inc.:
Statements of Comprehensive Income
Years Ended December 31
income
• LO18-2
2018
2017
2016
Net income
$856
$766
$594
Other comprehensive income:
Change in net unrealized gains on investments,
net of tax of $22, ($14), and $15 in 2018, 2017,
and 2016, respectively
34
(21)
23
Other
(2)
$888
(1)
$744
$618
Total comprehensive income
Kaufman reports accumulated other comprehensive income in its balance sheet as a component of shareholders
equity as follows:
($ in millions)
2018
2017
Shareholders' equity:
Common stock
355
355
Additional paid-in capital
Retained earnings
Accumulated other comprehensive income
8,567
6,544
8,567
5,988
107
75
Total shareholders'equity
$15,573
$14,985
Required:
1. What is comprehensive income and how does it differ from net income?
2. How is comprehensive income reported in a balance sheet?
3. Why is Kaufman's 2018 balance sheet amount different from the 2018 amount reported in the disclosure
note? Explain.
4. From the information provided, determine how Kaufman calculated the $107 million accumulated other
comprehensive income in 2018.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fd5c55706-ca7c-489c-92ed-e47a59dd38a4%2F2fb6af84-b1f7-4e4c-bd7b-b8adb9ed88e1%2Fcjhjvtq_processed.jpeg&w=3840&q=75)
Transcribed Image Text:E 18-1
Comprehensive
The following is from the 2018 annual report of Kaufman Chemicals, Inc.:
Statements of Comprehensive Income
Years Ended December 31
income
• LO18-2
2018
2017
2016
Net income
$856
$766
$594
Other comprehensive income:
Change in net unrealized gains on investments,
net of tax of $22, ($14), and $15 in 2018, 2017,
and 2016, respectively
34
(21)
23
Other
(2)
$888
(1)
$744
$618
Total comprehensive income
Kaufman reports accumulated other comprehensive income in its balance sheet as a component of shareholders
equity as follows:
($ in millions)
2018
2017
Shareholders' equity:
Common stock
355
355
Additional paid-in capital
Retained earnings
Accumulated other comprehensive income
8,567
6,544
8,567
5,988
107
75
Total shareholders'equity
$15,573
$14,985
Required:
1. What is comprehensive income and how does it differ from net income?
2. How is comprehensive income reported in a balance sheet?
3. Why is Kaufman's 2018 balance sheet amount different from the 2018 amount reported in the disclosure
note? Explain.
4. From the information provided, determine how Kaufman calculated the $107 million accumulated other
comprehensive income in 2018.
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