The following is from the 2018 annual report of Kaufman Chemicals, Inc.:

Kaufman reports accumulated other comprehensive income in its balance sheet as a component of shareholders' equity as follows:
($ in millions) .....................................................2018 ................2017
Shareholders' equity:
Common stock ......................................................355................ 355
Additional paid-in capital .......................................8,567 ..............8,567
Retained earnings ................................................6,544 ..............5,988
Accumulated other comprehensive income .....................107 .................75
Total shareholders' equity ...................................$ 15,573 ..........$ 14,985
Required:
1. What is comprehensive income and how does it differ from net income?
2. How is comprehensive income reported in a balance sheet?
3. Why is Kaufman's 2018 balance sheet amount different from the 2018 amount reported in the disclosure note? Explain.
4. From the information provided, determine how Kaufman calculated the $107 million accumulated other comprehensive income in 2018.

Transcribed Image Text:

Statements of Comprehensive Income Years Ended December 31 2017 $766 2018 2016 Net income Other comprehensive income: $856 $594 Change in net unrized gains on investments, net of tax of $22, (S14), and $15 in 2018, 2017, and 2016, respectively 34 (21) 23 Other Total comprehensive income $888 $744 $618