Question

Trayer Corporation has income from continuing operations of $276,000 for the year ended December 31, 2020. It also has the following items (before considering income taxes). 1. An unrealized loss of $70,000 on available-for-sale securities. 2. A gain of $24,000 on the discontinuance of a division (comprised of a $18,000 loss from operations and a $42,000 gain on disposal). Assume all items are subject to income taxes at a 23% tax rate. Prepare a statement of comprehensive income, beginning with income from continuing operations. (Enter loss using either a negative sign preceding the number e.g. -2,945 or parentheses e.g. (2,945).)

Answer 1

Answer and Explanation:

The preparation of the statement of comprehensive income is presented below;

income from continuing operations of $276,000

Discontinued operations

Loss from discontinued operations ($18,000 × 77%) -$13,860

Gain from disposal of operation ($42,000 × 77%) $32,340

Net income $294,480

Other comprehensive income

Unrealized loss from available for sale securities ($70,000 × 77%) -$53,900

Comprehensive income $240,580