Interest expense 21000 total other 4000 income before

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Interest expense(21,000)Total other(4,000)Income before taxes79,000Income tax expense24,000Net income55,000$ Other Comprehensive IncomeUnrealized gains and losses on available-for-sale securities.Translation gains and losses on foreign currency.Plus others+Reported in Stockholders’ EquityLO 8 Explain how to report other comprehensive income.Comprehensive Income
4-54ReviewGains and losses that bypass net income but affect stockholders' equity are referred to as a.comprehensive income. b.other comprehensive income.c.prior period income.d.unusual gains and losses.Special Reporting IssuesSpecial Reporting IssuesSpecial Reporting IssuesSpecial Reporting IssuesLO 8 Explain how to report other comprehensive income.
4-55Companies must display the components of other comprehensive income in one of three ways:1.A second separate income statement;2.A combined income statement of comprehensive income; or3.As part of the statement of stockholders’ equitySpecial Reporting IssuesSpecial Reporting IssuesSpecial Reporting IssuesSpecial Reporting IssuesLO 8 Explain how to report other comprehensive income.
4-56Special Reporting IssuesSpecial Reporting IssuesSpecial Reporting IssuesSpecial Reporting IssuesLO 8Illustration 4-19Comprehensive IncomeSecond income statement
4-57Special Reporting IssuesSpecial Reporting IssuesSpecial Reporting IssuesSpecial Reporting IssuesLO 8Comprehensive IncomeCombined statementV. Gill Inc.Combined Statement of Comprehensive IncomeFor the Year Ended December 31, 2012Sales revenue800,000$ Cost of goods sold600,000Gross profit200,000Operating expenses90,000Net income110,000Unrealized holding gain, net of tax30,000Comprehensive income140,000$
4-58Special Reporting IssuesSpecial Reporting IssuesSpecial Reporting IssuesSpecial Reporting IssuesLO 8 Explain how to report other comprehensive income.Comprehensive IncomeStatement of Stockholder’s EquityIllustration 4-20
4-59Special Reporting IssuesSpecial Reporting IssuesSpecial Reporting IssuesSpecial Reporting IssuesLO 8 Explain how to report other comprehensive income.Comprehensive IncomeBalance Sheet PresentationIllustration 4-21Presentation ofAccumulated OtherComprehensive Income in the Balance SheetRegardless of the display format used, the accumulated other comprehensive income of $90,000 is reported in the stockholders’ equity section of the balance sheet.
4-60ReviewThe FASB decided that the components of other comprehensive income must be displayed a.in a second separate income statement. b.in a combined income statement of comprehensive income.c.as a part of the statement of stockholders‘ equity.d.Any of these options is permissible.Special Reporting IssuesSpecial Reporting IssuesSpecial Reporting IssuesSpecial Reporting IssuesLO 8 Explain how to report other comprehensive income.
4-61RELEVANT FACTSPresentation of the income statement under GAAP follows either a single-step or multiple-step format. IFRS does not mention a single-step or multiple-step approach. Extraordinary items are prohibited under IFRS.Under IFRS, companies must classify expenses by either nature or function. GAAP does not have that requirement, but the U.S. SEC requires a functional presentation.

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