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Chapter 13: Q10E (page 658)

E17-10 (L04) (Comprehensive Income Disclosure) Assume the same information as E17-9 and that Steffi Graf, Inc. reports

net income in 2017 of \(120,000 and in 2018 of \)140,000. Total holding gains (including any realized holding gain or loss) equal

$40,000 in 2018.

Instructions

(a) Prepare a statement of comprehensive income for 2017, starting with net income.

(b) Prepare a statement of comprehensive income for 2018, starting with net income.

Short Answer

Expert verified

Comprehensive income on December 31, 2017, is $121,000

Comprehensive income on December 31, 2017, is $180,000

Step by step solution

01

 Statement of comprehensive income

STEFFI GRAF, SA
Statement of Comprehensive Income
For the Year Ended December 31, 2017

Net Income

$120,000

Other comprehensive income

Unrealized holding gain

$1,100

Comprehensive income

$121,100

02

Statement of comprehensive income

STEFFI GRAF, SA
Statement of Comprehensive Income
For the Year Ended December 31, 2018

Net Income

$140,000

Other comprehensive income

Unrealized holding gain

$40,000

Comprehensive income

$180,000

Accumulated other comprehensive income:

Beginning balance, January 1, 2018

$1,100

Current period other comprehensive income- Unrealized holding gain

$40,000

Ending Balance, December 31, 2018

$41,100

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Most popular questions from this chapter

How should a debt callable by the creditor be reported in the debtor’s financial statements?

EXCEL (Equity Securities Entries and Disclosures) Parnevik Company has the following securities in its

investment portfolio on December 31, 2017 (all securities were purchased in 2017): (1) 3,000 shares of Anderson Co. common

stock which cost \(58,500, (2) 10,000 shares of Munter Ltd. common stock which cost \)580,000, and (3) 6,000 shares of King Company

preferred stock which cost \(255,000. The Fair Value Adjustment account shows a credit of \)10,100 at the end of 2017.

In 2018, Parnevik completed the following securities transactions.

1. On January 15, sold 3,000 shares of Anderson’s common stock at \(22 per share less fees of \)2,150.

2. On April 17, purchased 1,000 shares of Castle’s common stock at \(33.50 per share plus fees of \)1,980.

On December 31, 2018, the market prices per share of these securities were Munter \(61, King \)40, and Castle $29. In addition, the

accounting supervisor of Parnevik told you that, even though all these securities have readily determinable fair values, Parnevik

will not actively trade these securities because the top management intends to hold them for more than one year.

Instructions

(a) Prepare the entry for the security sale on January 15, 2018.

(b) Prepare the journal entry to record the security purchase on April 17, 2018.

(c) Compute the unrealized gains or losses and prepare the adjusting entry for Parnevik on December 31, 2018.

(d) How should the unrealized gains or losses be reported on Parnevik’s income statement and balance sheet?

How are current liabilities related by definition to current assets? How are current liabilities related to a company’s operating cycle?

What is an onerous contract? Give two examples of an onerous contract.

On December 21, 2017, Zurich Company provided you with the following information regarding its trading investments.

December 31, 2017

Investments (Trading) Cost Fair Value Unrealized Gain (Loss)

Stargate Corp. shares \(20,000 \)19,000 \((1,000)

Carolina Co. shares 10,000 9,000 1000

Vectorman Co. shares 20,000 20,600 600

Total of portfolio \)50,000 \(48,600 \)(1,400)

Previous fair value adjustment balance-0-

Fair value adjustment-Cr. \((1,400)

During 2018, Carolina Co. shares were sold for \)9,500. The fair value of the shares on December 31, 2018, was Stargate Corp.

shares-\(19,300: Vectorman Co. shares-\)20,500

Instructions

(a) Prepare the adjusting journal entry needed on December 31, 2017.

(b) Prepare the journal entry to record the sale of the Carolina Co. shares during 2018.

(c) Prepare the adjusting journal entry needed on December 31, 2018.

See all solutions

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