Question

An inexperienced accountant for Indigo Corporation showed the following in the income statement: income before income taxes $321,000 and unrealized gain on available-for-sale securities (before taxes) $92,400. The unrealized gain on available-for-sale securities and income before income taxes are both subject to a 33% tax rate. Prepare a correct statement of comprehensive income.

Answer 1

$276,978

Step-by-step explanation:

Statement of comprehensive income

Income before income taxes: $321,000

Income taxes expenses: $321,000*33%= $105,930

Net Income/loss= $321,000-$105,930

=$215,070

Other comprehensive income

unrealized gain on available-for-sale securities

($92,400-($92,400*33%)

=$92,400-$30,492

=$61,908

Comprehensive income:

$215,070+$61,908=$276,978