Question

The following information was taken from the records of Raiders Inc. for the year 2017. Income tax applicable to income from continuing operations $260,000; income tax applicable to loss on discontinued operations $36,000; income tax applicable to unusual gain $45,000; income tax applicable to unusual loss $28,000. There is also unrealized holding gain on available-for-sale securities $20,000.

Unusual gain $145,000	Cash dividends declared $200,000
Loss on discounted operations $115,000	Retained earnings January 1, 2017 $850,000
Administrative expenses $336,000	Cost of goods sold $1,200,000
Rent Revenue $60,000	Selling expenses $430,000
Unusual loss $90,000	Sales $2,700,000
Shares outstanding during 2017 were 200,000.

Instructions:

(a). Prepare multiple-step income statement for 2017.

(b). Prepare retained earnings statement for 2017.

(c). Show how comprehensive income is reported using the two statement format.

Answer 1

RAIDERS INC.
MULTIPLE STEP INCOME STSTEMENT FOR 2017
	Particulars	Current Year
	Revenue From Operations
I.	Income
	Sales	2,700,000
	Less: Cost of Goods Sold	1,200,000
	Gross Profit	1,500,000
II.	Operating Expenses
	Selling Expense	430,000
	Administrative Expenses	336,000
	Total operating Expense	766,000
III.	Operating Income (I - II)	734,000
IV.	Non Operating Income and expenses
	Unusual Gain	145,000
	Rent Revenue	60,000
	Loss from discounted operation	(115,000)
	Unusual Loss	(90,000)
	Total Non Operating Income	-
V.	Profit Before Tax (III + IV)	734,000
VI.	Tax Expenses
	Tax on Continuing operation	260,000
	Tax Loss on discontinued operation	(36,000)
	Tax on Unusual Gain	45,000
	Tax Loss Unusual Loss	(28,000)
	Total Tax Expense	241,000
VII.	Net Income After Tax (v - VII)	493,000
RETAINED EARNING STSTEMENT FOR 2017
	Retained Earning 1 Jan 2017	850,000.00
	Add: Net Income	493,000.00
	Total	1,343,000.00
	Less: Cash Dividend declared	(200,000.00)
	Retained earning 31-jan-2017	1,143,000.00
	Unrealised holding gain on available for sale security	20,000.00
	Note: Unrealised gain from available for sale secuity is reported as saperate line item in the Equity section of the Balance sheet. It is not reported in the income ststement until the security is sold.
COMPREHENSIVE INCOME STSTEMENT FOR 2017
	NET INCOME FROM INCOME STATEMENT	493,000.00
	ADD: Other Comprehensive Income
	Unrealised holding gain on available for sale security	20,000.00
	Comprehensive Income	513,000.00