The trial balance of Kroeger Inc. included the following accounts as of December

Question

The trial balance of Kroeger Inc. included the following accounts as of December 31, 2018: Debits Credits ales revenuc Interest revenue Gain on sale of investments Unrealized gains on investments Forei 200,00 60,00 120,00 140,00 ost of Selling expenses Goodwill impairment loss Interest ex General and administrative ex translation adjustment 160,00 100,00 600,00 500,00 30,00 500,00 sold Kroeger had 300,000 shares of stock outstanding throughout the year. Income tax expense has not yet been accrued. The effective tax rate is 40%. Question 1: 10 Points Prepare a 2018 multiple-step income statement for Kroeger Inc. with earnings per share disclosure. Question 2: 10 Points Prepare a 2018 separate statement of comprehensive income for Kroeger Inc.

Explanation / Answer

SOLUTION:

PART-1 Kroeger Inc. Multi-step Income Statement Particulars Debit Credit Sales revenue 8,200,000 COGS 6,100,000 Gross profit 2,100,000 Operating expenses Selling 600,000 General $ Admin 500,000 Goodwill impairement loss 500,000 Total operating exp 1,600,000 Operating income 500,000 Other income (expenses) Interest revenue 60,000 Interest expense -30,000 Gain on sale of investment 120,000 Total Other income (expenses) 150,000 Income before income taxes 650,000 Income tax expense 260,000 Net income 390,000 EPS 1.3 PART-2 Kroeger Inc. Comprehensive Income Statement Net income 390,000 Other comprehensive income/ loss Foreign currency translation losses, net of tax -96,000 Unrealized gains on investments, net of tax 84,000 -12,000 Ttotal comprehensive loss Comprehensive income 378,000

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