Chapter 4, Problem 4.8P

Multiple-step statement of income and comprehensive income

• LO4–1, LO4–3, LO4–5, LO4–6

Duke Company’s records show the following account balances at December 31, 2018:

Sales	$15,000,000
Cost of goods sold	9,000,000
General and administrative expenses	1,000,000
Selling expenses	500,000
Interest expense	700,000

Income tax expense has not yet been determined. The following events also occurred during 2018. All transactions are material in amount.

1. $300,000 in restructuring costs were incurred in connection with plant closings.

2. Inventory costing $400,000 was written off as obsolete. Material losses of this type are considered to be unusual.

3. It was discovered that depreciation expense for 2017 was understated by $50,000 due to a mathematical error.

4. The company experienced a negative foreign currency translation adjustment of $200,000 and had unrealized gains on investments of $180,000.

Required:

Prepare a single, continuous multiple-step statement of comprehensive income for 2018. The company’s effective tax rate on all items affecting comprehensive income is 40%. Each component of other comprehensive income should be displayed net of tax. Ignore EPS disclosures.