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Duke Company’s records show the following account balances at December 31, 2018: Sales $ 18,200,000 Cost of goods sold 10,600,000 General and...

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Accounting

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

Sales$18,200,000
Cost of goods sold10,600,000
General and administrative expenses1,160,000
Selling expenses660,000
Interest expense860,000


Income tax expense has not yet been determined. The followingevents also occurred during 2018. All transactions are material inamount.

  1. $460,000 in restructuring costs were incurred in connectionwith plant closings.
  2. Inventory costing $560,000 was written off as obsolete.Material losses of this type are considered to be unusual.
  3. It was discovered that depreciation expense for 2017 wasunderstated by $66,000 due to a mathematical error.
  4. The company experienced a negative foreign currency translationadjustment of $360,000 and had unrealized gains on investments of$340,000.


Required:
Prepare a single, continuous multiple-step statement ofcomprehensive income for 2018. The company’s effective tax rate onall items affecting comprehensive income is 40%. Each component ofother comprehensive income should be displayed net of tax. IgnoreEPS disclosures. (Amounts to be deducted should beindicated with a minus sign.)

Answer & Explanation Solved by verified expert
4.4 Ratings (939 Votes)
DUKE COMPANY Statement of Comprehensive Income For the Year Ended December 31 2018 Sales 18200000 Less Cost of goods sold 10600000 Gross profit 7600000 Less Operating expenses General and    See Answer
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Transcribed Image Text

Duke Company’s records show the following account balances atDecember 31, 2018:Sales$18,200,000Cost of goods sold10,600,000General and administrative expenses1,160,000Selling expenses660,000Interest expense860,000Income tax expense has not yet been determined. The followingevents also occurred during 2018. All transactions are material inamount.$460,000 in restructuring costs were incurred in connectionwith plant closings.Inventory costing $560,000 was written off as obsolete.Material losses of this type are considered to be unusual.It was discovered that depreciation expense for 2017 wasunderstated by $66,000 due to a mathematical error.The company experienced a negative foreign currency translationadjustment of $360,000 and had unrealized gains on investments of$340,000.Required:Prepare a single, continuous multiple-step statement ofcomprehensive income for 2018. The company’s effective tax rate onall items affecting comprehensive income is 40%. Each component ofother comprehensive income should be displayed net of tax. IgnoreEPS disclosures. (Amounts to be deducted should beindicated with a minus sign.)

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