Question

Turnball Ltd. is developing financial statements for the year ended December 31, 2019. The average income...

Turnball Ltd. is developing financial statements for the year ended December 31, 2019. The average income tax rate is 40 percent. The following pre-tax data are available:

Revenues

$420,000

Expenses

360,000

Gain from Discontinued Operations (pre-tax)

24,000

Unrealized foreign exchange loss on translation of foreign subsidiary (net of tax)

10,000


Required:
Assuming all of the above items are subject to the average tax rate of 40%, prepare a statement of Comprehensive Income (in proper form) for the year ended December 31, 2019.

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Answer #1

Turnball Ltd.

Statement of Comprehensive Income

For the year ended December 31, 2019
Revenues 420,000
Less: Expenses (360,000)
Profit before Tax 60,000
Less: Tax (60,000*40%) (24,000)
Profit from Continuing Operations 36,000
Gain from Discontinued Operations [(1-0.4)*24,000] 14,400
Profit for the year 50,400
Unrealized foreign exchange loss on translation of foreign subsidiary (net of tax) (10,000)
TOTAL COMPREHENSIVE INCOME FOR THE YEAR 40,400
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