On December 31, 2016, Melissa Company's adjusted trial balance contained the following account balances:
Sales (net)$175,000
Operating expenses18,000
Unrealized decrease in value of available-for-sale securities10,000
Cost of goods sold100,000
The income tax rate is 30%, and the company had 2,000 shares of common stock outstanding during the year.Required:
a.Prepare the income statement for the year 2016 that includes comprehensive income.b.Prepare the income statement for the year 2016 and a separate statement of comprehensive income.
What will be an ideal response?
?
| a. | MELISSA COMPANYStatement of Net Income and Comprehensive IncomeFor Year Ended December 31, 2016? | |
| Sales | $175,000 | |
| Cost of goods sold | 100,000 | |
| Gross profit | $ 75,000 | |
| Operating expenses | 18,000 | |
| Income before income taxes | $ 57,000 | |
| Income tax expense | 17,100 | |
| Net income | $ 39,900 | |
| Other comprehensive income: | ? | |
| ? | Unrealized decrease in value of available-for-sale securities | ? |
| ? | (net of $3,000 income tax credit) | (7,000) |
| Comprehensive income | $ 32,900 | |
| ? | ? | |
| Earnings per share: | ? | |
| ? | On net income | $ 19.95 |
| b. | MELISSA COMPANYIncome StatementFor Year Ended December 31, 2016? | |
| Sales (net) | $175,000 | |
| Cost of goods sold | 100,000 | |
| Gross profit | $ 75,000 | |
| Operating expenses | 18,000 | |
| Income before income taxes | $ 57,000 | |
| Income tax expense | 17,100 | |
| Net income | $ 39,900 | |
| ? | ? | |
| Earnings per share: | ? | |
| ? | On net income | $ 19.95 |
| MELISSA COMPANYStatement of Comprehensive IncomeFor Year Ended December 31, 2016 | ||
| Net income | $39,900 | |
| Other comprehensive income: | ? | |
| ? | Unrealized decrease in value of available-for-sale securities | ? |
| ? | (net of $3,000 income tax credit) | (7,000) |
| Comprehensive income | $32,900 | |
?
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