Question

JDW Corporation reported the following for 20X1: net sales $2,929,500; cost of goods sold $1,786,995; selling and administrative expenses $585,900; unrealized holding loss on available-for-sale securities (considered other comprehensive income) $22,000; a positive foreign currency translation adjustment $26,250 (considered other comprehensive income); and an unrealized loss from pension adjustment (considered other comprehensive income) $7,000. JDW’s tax rate was 21%. Ignore income taxes related to amounts in other comprehensive income. Required: Prepare a multiple-step income statement and

Answer 1

Answer:

JDW Corporation

Income Statement

For the year ended December 31, 20x1

Sales revenue                                                                       $2,929,500

Cost of goods sold                                                               ($1,786,995)

Gross margin                                                                          $1,142,505

S&A expenses                                                                       ($585,900)

Income from operations                                                         $556,605

Other comprehensive income:

• Unrealized holding loss AFS securities ($22,000)
• Currency translation gain $26,250
• Unrealized loss from pension adjustment ($7,000)      
• Total other comprehensive income/loss                        ($2,750)

Net income before taxes                                                        $553,855