Question

the trial balance for lindor corporation, a manufacturing company, for the year ended december 31, 2024, included the following accounts: account title debits credits sales revenue $ 2,460,000 cost of goods sold $ 1,470,000 selling and administrative expense 423,000 interest expense 47,000 gain on debt securities 87,000 the gain on debt securities is unrealized and classified as other comprehensive income. the trial balance does not include the accrual for income taxes. lindor's income tax rate is 25%. required: prepare a single, continuous multiple-step statement of comprehensive income.

Answer 1

The accounting profit of the firm is $50,000.

Step-by-step explanation:

To calculate the accounting profit, we need to subtract the explicit costs from the total revenues. In this case, the firm had sales revenue of $1 million, labor costs of $600,000, capital costs of $150,000, and material costs of $200,000. So, the accounting profit can be calculated as follows:

Accounting Profit = Total Revenues - Explicit Costs

Accounting Profit = $1,000,000 - ($600,000 + $150,000 + $200,000) = $50,000

Answer 2

To prepare the statement of comprehensive income for Lindor Corporation, you need to include sections such as net sales revenue, cost of goods sold, gross profit, selling and administrative expenses, and net income. The gain on debt securities should be classified as other comprehensive income. The statement should not include the accrual for income taxes.

Step-by-step explanation:

To prepare a single, continuous multiple-step statement of comprehensive income for Lindor Corporation, we need to include the following sections: net sales revenue, cost of goods sold, gross profit, selling and administrative expenses, operating income, gains and losses, other comprehensive income, and net income. Here is an example of how the statement might look:

Lindor Corporation

Statement of Comprehensive Income

For the Year Ended December 31, 2024

1. Net Sales Revenue: $2,460,000
2. Cost of Goods Sold: $1,470,000
3. Gross Profit: $990,000 ($2,460,000 - $1,470,000)
4. Selling and Administrative Expenses: $423,000
5. Operating Income: $567,000 ($990,000 - $423,000)
6. Gain on Debt Securities (Other Comprehensive Income): $87,000
7. Net Income: $654,000 ($567,000 + $87,000)

Note that the gain on debt securities is classified as other comprehensive income, which is separate from the net income. Lastly, this statement does not include the accrual for income taxes.