Question

In its proposed 2017 income statement, Ayayai Corp. reports income before income taxes $548,000, income taxes $82,200 (not including unusual items), loss on operation of discontinued music division $62,100, gain on disposal of discontinued music division $46,500, and unrealized loss on available-for-sale securities $160,000. The income tax rate is 15%.

Prepare a correct statement of comprehensive income, beginning with income before income taxes

Answer 1

Answer and Explanation:

Given:

Net income before income tax = $548,000

Income tax = $82,200

Loss on discounted music(less tax) = $62,100 - (15% of $62,100) = $52,785

Gain on discounted music(less tax) = $46,500 - (15% of $46,500) = $39,525

Unrealized loss = $160,000 - (15% of $160,000) = $136,000

Statement Of Comprehensive Income

Particular Amount

Net income before income tax $548,000

Less: Income tax $82,200

Income from Operations $465,800

Less: Loss on discounted music(less tax) $52,785

Add: Gain on discounted music(less tax) $39,525

Net income before unrealized loss $452,540

Less: Unrealized loss $136,000

Comprehensive income $316,540