Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Note: There is no answer option to put undercosted depreciation expense. For some reason income tax expense is wrong. It's Income before tax multiple the

image text in transcribedimage text in transcribed

Note: There is no answer option to put undercosted depreciation expense. For some reason income tax expense is wrong. It's Income before tax multiple the tax rate of 25% to get the tax expense, isn't it? Please help me figure this out. Thanks.

Duke Company's records show the following account balances at December 31, 2021: Sales revenue Cost of goods sold General and administrative expense Selling expense Interest expense $16,000,000 9,500,000 1,050,000 550,000 750,000 Income tax expense has not yet been determined. The following events also occurred during 2021. All transactions are material in amount. 1. $350,000 in restructuring costs were incurred in connection with plant closings. 2. Inventory costing $450,000 was written off as obsolete. Material losses of this type are considered to be unusual. 3. It was discovered that depreciation expense for 2020 was understated by $55,000 due to a mathematical error. 4. The company experienced a negative foreign currency translation adjustment of $250,000 and had an unrealized gain on debt securities of $230,000. Required: Prepare a single, continuous multiple-step statement of comprehensive income for 2021. The company's effective tax rate on all items affecting comprehensive income is 25%. Each component of other comprehensive income should be displayed net of tax. Ignore EPS disclosures. (Amounts to be deducted should be indicated with a minus sign.) DUKE COMPANY Statement of Comprehensive Income For the Year Ended December 31, 2021 Sales revenue Cost of goods sold Gross profit Operating expenses General and administrative expenses $ 1,050,000 Restructuring costs 350,000 Selling expenses 550,000 Loss on inventory write-down (450,000) $ 16,000,000 9,500,000 6,500,000 1,500,000 5,000,000 Total operating expenses Operating income Other income (expense): Interest expense (750,000) 0 4,250,000 (1,062,500) 3,187,500 Income before income taxes Income tax expense Net income Other comprehensive income, net of tax: Foreign currency translation adjustment Gain on debt securities Total other comprehensive income (loss) Comprehensive income (187,500) 172,500 (15,000) $ 3,172,500

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Modern Auditing And Assurance Services

Authors: Philomena Leung, Paul Coram, Barry J. Cooper, Peter Richardson

6th Edition

1118615247, 9781118615249

More Books

Students also viewed these Accounting questions