Answer:
Kroeger Inc.
Statement of Comprehensive Income for the year ended December 31, 2021:
Income after taxes $4,966,500
Gain on debt securities 138,000
Loss on projected benefit obligation (156,000)
Net Income $4,948,500
Explanation:
a) Kroeger Inc. Trial Balance as of December 31, 2021:
Debits Credits
Sales revenue 8,340,000
Interest revenue 56,000
Gain on sale of investments 116,000
Gain on debt securities 138,000
Loss on projected benefit obligation 156,000
Cost of goods sold 144,000
Selling expense 740,000
Goodwill impairment loss 520,000
Interest expense 26,000
General and administrative expense 460,000
b) Kroeger Inc. Income Statement for the year ended December 31, 2021:
Sales revenue $8,340,000
less Cost of goods sold 144,000
Gross Profit $8,196,000
General & Admin. Expense 460,000
Selling expenses 740,000 1,200,000
Operating Income $6,996,000
Interest Revenue 56,000
Interest Expense (26,000)
Goodwill impairment loss (520,000)
Gain on sale of investments 116,000
Income before taxes $6,622,000
Income Tax (25%) $1,655,500
Income after taxes 4,966,500
c) According to the corporate finance institute, "the Statement of Comprehensive Income provides a summary of a company's net assets over a given period of time. It highlights the adjustments on equity and other comprehensive income (OCI). Other comprehensive income includes net after taxes and other unrealized incomes minus unrealized losses, such as unrealized gains or losses on hedge/derivative financial instruments and foreign currency transaction gains or losses.
d) Goodwill impairment is recognized as a loss on the income statement under other operating expenses and as a reduction in the goodwill account.
e) Investopedia.com says that "projected benefit obligation (PBO) is an actuarial measurement of what a company will need at the present time to cover future pension liabilities." Under U.S. GAAP, the adjustments for PBO are recorded through other comprehensive income in shareholders' equity and are amortized into the income statement over time.
f) A gain on sale of investments is the amount by which the proceeds from the sale of investments exceed the carrying amount of the investments. It is reported as a non-operating gain in the income statement.
g) Securities that are held-for-trading are recorded on the balance sheet at their fair value, and the unrealized gains and losses are recorded on the income statement. According to strategiccfo.com "Unrealized income or losses are recorded in an account called accumulated other comprehensive income, which is found in the owner's equity section of the balance sheet." They are gains and losses from changes in the value of assets or liabilities that have not yet been settled and recognized.
