For the year ended December 31, 2015, Patsy Inc. had income from continuing operations of $1,500,000....

For the year ended December 31, 2015, Patsy Inc. had income from continuing operations of $1,500,000. During 2015, it disposed of its Calgary division at a loss before taxes of $125,000. Before the disposal, the division operated at a before-tax loss of $150,000 in 2014 and $175,000 in 2015. Patsy also had an unrealized gain in its Available-for-sale investments of $27,500 (net of tax). It accounts for its investments in accordance with IAS 39. Patsy had 50,000 outstanding common shares for the entire 2015 fiscal year and its income tax rate is 30%. Required: a. Prepare a partial statement of comprehensive income with proper disclosures for Patsy Inc. beginning with income from continuing operations. Patsy follows IFRS. b. How would the statement in part (a) differ if Patsy followed ASPE?

Expert Solution

a.

Statement of Comprehensive income - IFRS

	Particulars	$
	Income from continuing operation	$ 1,500,000
Less	Tax	$ 450,000
	Income from continuing operation after tax	$ 1,050,000
Less	Loss from discontinuing operation net of tax
	Loss on sale of division	$ (87,500)
	Oprating losses	$ (122,500)
	Net income	$ 840,000
Add	Other comprehensive income net of tax
	Unrealized gain of Available for sale securities	$ 27,500
	Comprehensive Income	$ 867,500

b.

Statement of Comprehensive income - ASPE

	Particulars	$
	Income from continuing operation	$ 1,500,000
Less	Tax	$ 450,000
	Income from continuing operation after tax	$ 1,050,000
Less	Loss from discontinuing operation net of tax
	Loss on sale of division	$ (87,500)
	Oprating losses	$ (122,500)
	Net income	$ 840,000

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