Question

From the following information for the year 2018 prepare an income statement and a statement of...

From the following information for the year 2018 prepare an income statement and a statement of shareholders’ equity for a company with shareholders’ equity at the beginning of 2018 of $5270 million. Amounts are in million
Sales​$ 7158
Common dividends paid​ 250
Selling expense​​ 2350
Research and Development costs​ 600
Cost of goods sold​ 4850
Share issues​ 910
Unrealized gain on securities available for sale​ 97
Income Taxes ​ (450)

Also calculate comprehensive income and net payout. Income taxes are negative. How can this be?
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Answer #1

Answer- Comprehensive Income = -95

Explanation:-

Calculation of Comprehensive Income
Amount(in million) Amount (in Million)
Sale 7158
Les: Cost of Goods Sold 4850
Gross Profit 2308
Less:Operating Expenses;-
Selling Expenses 2350
Research & Development Cost 600 2950
Earning Before Interest&Taxes (EBIT) (2308-2950) -642
Add : Tax Shield(*) -450
Earnings After Tax -192
Add: Unrealized Gain on securities for sale 97
Comprehensive Income -95

(*) Under This question, We have a negatve Tax Expense, It means we Have Tax shield because of a Negative EBIT

Calculation of Net Payout

Net payout = Divident Issued + Stock Rpurchase - Sock Issues

=250+0-910

= -660

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