Chapter 18, Problem 18.1E

Comprehensive income

• LO18–2

The following is from the 2018 annual report of Kaufman Chemicals, Inc.:

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	8,567	8,567
Retained earnings	6,544	5,988
Accumulated other comprehensive income	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.