An inexperienced accountant for Sarasota Corp. showed the following in the income statement: income before income...

An inexperienced accountant for Sarasota Corp. showed the following in the income statement: income before income taxes $359,000 and unrealized gain on available-for-sale securities (before taxes) $88,800. The unrealized gain on available-for-sale securities and income before income taxes are both subject to a 28% tax rate. Prepare a correct statement of comprehensive income.

Expert Solution

SARASOTA CORP.
Partial Statement of Comprehensive Income
Income Before Income Taxes (a)	$359,000
Income Tax Expense [$359,000 x 28%] (b)	$100,520
Net Income / (Loss) (c = a - b)	$258,480
Other Comprehensive Income
Unrealized Holding Gain on Available-for-Sale Securities [Refer working note below] (d)	$63,936
Comprehensive Income (c + d)	$322,416

.

Working note - Calculation of unrealized gain on available-for-sale Securities, net of income taxes
Unrealized gain on available-for-sale securities (before taxes)	$88,800
Less: Income tax [$88,800 x 28%]	$24,864
Unrealized gain on available-for-sale Securities, net of income taxes	$63,936

ekkarill92 answered 5 months ago

1. An inexperienced accountant for Martinez Corp. showed the following in the income statement: net income...

1. An inexperienced accountant for Martinez Corp. showed the following in the income statement: net income $215,970 and unrealized gain on available-for-sale securities (before taxes) $93,000. The unrealized gain on available-for-sale securities subject to a 31% tax rate. Prepare a correct statement of comprehensive income. MARTINEZ CORP. Partial Statement of Comprehensive Income select a comprehensive income item DividendsExpensesNet Income / (Loss)Retained EarningsRevenueTotal...

Income Statement An inexperienced accountant for Prestwick Company prepared the following income statement for the month...

Income Statement An inexperienced accountant for Prestwick Company prepared the following income statement for the month of August, current year. PRESTWICK COMPANY AUGUST 31, CURRENT YEAR Revenues: Services provided to customers $17,000 Investment by stockholders 5,000 Loan from bank 15,000 $37,000 Expenses: Payments to long-term creditors $11,700 Expenses required to provide services to customers 7,800 Purchase of land 16,000 35,500 Net income $ 1,500 Statement of Cash Flows Prepare a revised income statement in accordance with generally accepted accounting principles....

An inexperienced accountant prepared this condensed income statement for Simon Company, a retail firm that has...

An inexperienced accountant prepared this condensed income statement for Simon Company, a retail firm that has been in business for a number of years. SIMON COMPANY Income Statement For the Year Ended December 31, 2017 Prepare a correct multiple-step income statement. Revenues Net sales $850,000 Other revenues 22,000 Cost of goods sold 555,000 Gross profit 317,000 Operating expenses Selling expenses 109,000 Administrative expenses 103,000 Net earnings $105,000 As an experienced, knowledgeable accountant, you review the statement and determine the following...

An inexperienced accountant for Duran Corporation made the following entries. ...

An inexperienced accountant for Duran Corporation made the following entries. July 1 Cash 170,000 Common Stock 170,000 (Issued 25,000 shares of common stock, par value $6 per share) Sept. 1 Common Stock 24,000 Retained Earnings 16,000 Cash 40,000 (Purchased 4,000 shares...

Haag Corp.'s 2021 income statement showed pretax accounting income of $2,500,000. To compute the federal income...

Haag Corp.'s 2021 income statement showed pretax accounting income of $2,500,000. To compute the federal income tax liability, the following 2021 data are provided: Income from exempt municipal bonds $ 100,000 Depreciation deducted for tax purposes in excess of depreciation deducted for financial statement purposes 200,000 Estimated federal income tax payments made 330,000 Enacted corporate income tax rate 20% Prepare the accounting entry on Haag Corp’s books for 2021

An inexperienced accountant for Can’t Add Company recorded the following transactions in the records of the...

An inexperienced accountant for Can’t Add Company recorded the following transactions in the records of the company for the year ended December 31, 2019. The controller has questioned the appropriateness of the entries since she thinks that they have not been recorded in accordance with generally accepted accounting principles. 1. An order for $61,500 was received from a customer on December 29, 2019 for products on hand. This order was shipped f.o.b. shipping point on January 9, 2020. The accountant...

In its proposed 2017 income statement, Whispering Winds Corp. reports income before income taxes $476,000, income...

In its proposed 2017 income statement, Whispering Winds Corp. reports income before income taxes $476,000, income taxes $76,160 (not including unusual items), loss on operation of discontinued music division $62,300, gain on disposal of discontinued music division $43,000, and unrealized loss on available-for-sale securities $141,000. The income tax rate is 16%. Prepare a correct statement of comprehensive income, beginning with income before income taxes.

Hanson Company has an inexperienced accountant. During the first month on the job, the accountant made...

Hanson Company has an inexperienced accountant. During the first month on the job, the accountant made the following errors in journalizing transactions. All entries were posted as made. The purchase of store supplies on account for $1,510 was recorded as a debit to Supplies $1,150 and a credit to Accounts Payable $1,150. The purchase of office supplies for $650 cash was debited to Equipment $210 and credited to Cash $210. A $500 withdrawal of cash for B. Hanson’s personal use...

Hanson Company has an inexperienced accountant. During the first months on the job, the accountant made...

Hanson Company has an inexperienced accountant. During the first months on the job, the accountant made the following errors in journalizing transactions. All entries were posted as made. 1. The purchase of supplies for $650 cash was debited to Equipment $210 and credited to Cash $210. 2. A $500 dividend of cash for B. Hanson’s personal use was debited to Salaries and Wages Expense $900 and credited to Cash $900. 3. A payment on account of $820 to a creditor...

A company's income statement showed the following: net income, $124,000; depreciation expense, $30,000; and gain on...

A company's income statement showed the following: net income, $124,000; depreciation expense, $30,000; and gain on sale of plant assets, $14,000. An examination of the company's current assets and current liabilities showed the following changes as a result of operating activities: accounts receivable decreased $9,400; merchandise inventory increased $18,000; prepaid expenses decreased $6,200; accounts payable increased $3,400. Calculate the net cash provided or used by operating activities. Select one: a. $155,000. b. $145,800. c. $141,000. d. $139,000. Please Solve As...

Question