The following is from the 2018 annual report of Kaufman Chemicals, Inc.: Statements of Comprehensive Income Years Ended December 31 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 Total comprehensive income $618 Kaufman reports accumulated other comprehensive income in its balance sheet as a component of shareholders equity as follows: (S in millions) 2018 2017 Shareholders' equity: Common stock 355 355 Additional paid-in capital Retained earnings Accumulated other comprehensive income 8,567 8,567 5,988 6,544 107 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.

The following is from the 2018 annual report of Kaufman Chemicals, Inc.: Statements of Comprehensive Income Years Ended December 31 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 Total comprehensive income $618 Kaufman reports accumulated other comprehensive income in its balance sheet as a component of shareholders equity as follows: (S in millions) 2018 2017 Shareholders' equity: Common stock 355 355 Additional paid-in capital Retained earnings Accumulated other comprehensive income 8,567 8,567 5,988 6,544 107 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.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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