Question

The trial balance of Rollins Inc. included the following accounts as of December 31, 2021: Debits Credits Sales revenue 5,800,000 Interest revenue 39,500 Loss on sale of investments 20,000 Loss on debt investments 146,000 Gain on projected benefit obligation 255,000 Cost of goods sold 4,310,000 Selling expense 390,000 Restructuring costs 175,000 Interest expense 10,000 General and administrative expense 290,000 The loss on debt investments represents a decrease in the fair value of debt securities and is classified as part of other comprehensive income. Rollins had 100,000 shares of stock outstanding throughout the year. Income tax expense has not yet been accrued. The effective tax rate is 25%. Required: Prepare a 2021 single, continuous statement of comprehensive income for Rollins Inc. Use a multiple-step income statement format.

Answer 1

Single

Rollins Inc.
INCOME STATEMENT
For the year ended Dec 31,2021
Sales revenue		$5800000
Cost of goods sold		(4310000)
Gross profit		1490000
Operating expenses:
Selling expenses	390000
Restructuring costs	175000
General and administrative expense	290000
Total Operating expenses		(855000)
Operating income		635000
Non-operating income (expense):
Loss on sale of investments	-20000
Interest revenue	39500
Gain on projected benefit obligation	255000
Interest expense	-10000
Total other Non-operating income (expense)		264500
Income before income tax		899500
Income tax expense (899500x 25%)		(224875)
Net income		$674625

Rollins Inc.
COMPRHENSIVE INCOME STATEMENT
For the year ended Dec 31,2021
Net income		$674625
Other comprehensive income (loss):
Unrealized Loss on debt investments -AFS	-1460000
Total other comprehensive income (loss)		(146000)
Comprehensive income		$528625

Continues

Rollins Inc.
STATEMENT OF COMPREHENSIVE INCOME
For the year ended Dec 31,2021
Sales revenue		$5800000
Cost of goods sold		(4310000)
Gross profit		1490000
Operating expenses:
Selling expenses	390000
Restructuring costs	175000
General and administrative expense	290000
Total Operating expenses		(855000)
Operating income		635000
Non-operating income (expense):
Loss on sale of investments	-20000
Interest revenue	39500
Gain on projected benefit obligation	255000
Interest expense	-10000
Total other Non-operating income (expense)		264500
Income before income tax		899500
Income tax expense (899500x 25%)		(224875)
Net income		$674625
Other comprehensive income adjustment:
Unrealized Loss on debt investments -AFS	-1460000
Total other comprehensive income (loss)		(146000)
Comprehensive income		$528625