Question

Skysong Corporation reported the following for 2020: net sales $1,236,500, cost of goods sold $732,900, selling and administrative expenses $331,400, and an unrealized holding gain on available-for-sale debt securities $24,400.Prepare a statement of comprehensive income using the one statement format. (Ignore income taxes and earnings per share.)Prepare a statement of comprehensive income, using the two statement format. (Ignore income taxes and earnings per share.)

Answer 1

Answer:

A. $196,600

B. $196,600

Explanation:

A. Preparation of a statement of comprehensive income using the one statement format.

SKYSONG CORPORATION Statement of Comprehensive Income For the Year Ended

Sales revenue $1,236,500

Less Cost of goods sold ($732,900)

Gross profit $503,600

($1,236,500-$732,900)

Selling and administrative expenses $331,400

Net income $172,200

($503,600-$331,400)

Add Unrealized holding gain, net of tax $24,400

Comprehensive income $196,600

($172,200+$24,400)

Therefore the statement of comprehensive income using the one statement format will be $196,600

(b) Preparation of a statement of comprehensive income using the two statement format

SKYSONG CORPORATION Income Statement and Comprehensive Income Statement For the Year Ended

Sales $1,236,500

Cost of goods sold ($732,900)

Gross profit $503,600

($1,236,500-$732,900)

Selling and administrative expenses $331,400

Net income $172,200

($503,600-$331,400)

COMPREHENSIVE INCOME

Net income $172,200

Unrealized holding gain $24,400

Comprehensive income $196,600

($172,200+$24,400)

Therefore the statement of comprehensive income using the two statement format will be $196,600