Case #2 : Accumulated other comprehensive income and retained earnings Radiohead had the following balances in its Retained Earnings and Accumulated Other Comprehensive Income accounts at 1/1/x6. The company has an effective tax rate of 40%. The following occurred during 20x6: - Radiohead recorded a $180,000 unrealized pretax gain on available for sale securities. - Radiohead incurred a pretax unrealized loss of $240,000 on its foreign currency investments. - During the year, Radiohead recorded net income of $437,500 and declared dividends of $50,000. It paid $35,000 of these dividends. Required: Determine the balance of Retained Earnings and Accumulated Other Comprehensive Income at year end. Determine Comprehensive Income for 20x6. Case \#3: Income statement and comprehensive income concepts 1. Which total is more indicative of future earnings and would be more likely used by investors, net income or comprehensive income? Explain your answer by identifying the differences between net income and comprehensive income (i.e., what income effects are included in comprehensive income but not net income). 2. Describe the reasons for including certain losses and gains in other comprehensive income rather than net income. 3. What are the three methods of disclosure available to companies regarding other comprehensive income items and comprehensive income