In: Accounting
10. The following information relates to Nabisco Corporation for the year ended December 31, 2016. All amounts are before income taxes. Assume a 25% income tax rate for all items.
Net sales $ 1,050,000
Other expenses and losses $ 100,000
Operating expenses $ 200,000
Other revenues and gains $ 60,000
Cost of goods sold $ 450,000
Unrealized loss on available-for-sale securities $ 50,000
Additional information:
The entire snack division was discontinued on September 30. The loss from operations for this division before income tax was $60,000. The snack division was sold at a gain of $40,000 before income taxes.
Instructions
Prepare a statement of comprehensive income for the year in good form. Make sure to include all the proper subtotals.
Nabisco Corporation | ||
Income statement | ||
For the year ended December 31,2016 | ||
Particulars | Amount ($) | |
Sales revenue | 1,050,000 | |
Cost of goods sold | 450,000 | |
Gross profit | 600,000 | |
Operating expenses | 200,000 | |
Income from operations | 400,000 | |
Other revenues and gains | 60,000 | |
Other expenses and losses | 100,000 | |
Income from continuing operations before income tax | 360,000 | |
Income tax (25% of $360,000) | 90,000 | |
Income from continuing operations | 270,000 | |
Discontinued operations | ||
Loss on disposal 60,000-40,000) | 20,000 | |
Less : Applicable income tax (20,000*25%) | 5,000 | 15,000 |
Net income | 255,000 | |
Other comprehensive income | ||
Items that may be reclassified subsequently to net income or loss: | ||
Unrealized loss on available-for-sale securities | 50,000 | |
Less : Applicable income tax (50,000*25%) | 12,500 | 37,500 |
Comprehensive income | 292,500 |