Chapter 4 The Income Statement, Comprehensive Income, and the
Statement of Cash Flows
Use the following to answer questions 85–87:
The trial balance of Kroeger Inc. included the following accounts as of December 31, 2016:
Debits
Credits
Sales revenue
8,200,000
Interest revenue
60,000
Gain on sale of investments
120,000
Unrealized gains on investments
140,000
Foreign currency translation losses
160,000
Cost of goods sold
6,100,000
Selling expenses
600,000
Goodwill impairment loss
500,000
Interest expense
30,000
General and administrative expenses
500,000
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%.
85. Required: Prepare a 2016 multiple-step income statement for Kroeger Inc. with earnings per
share disclosure.
120,000
Chapter 4 The Income Statement, Comprehensive Income, and the
Statement of Cash Flows
86. Required: Prepare a 2016 separate statement of comprehensive income for Kroeger Inc.
87. Required: Prepare a 2016 single, continuous statement of comprehensive income for Kroeger
Inc. Use a multiple-step income statement format.
Chapter 4 The Income Statement, Comprehensive Income, and the
Statement of Cash Flows
88. The following income statement items appeared on the adjusted trial balance of Foxworthy
Corporation for the year ended December 31, 2016 ($ in 000s): sales revenue, $22,300; cost of
goods sold, $14,500; selling expenses, $2,300; general and administrative expenses, $1,200;
dividend revenue from investments, $200; interest expense, $300. Income taxes have not yet
been accrued. The company’s income tax rate is 40% on all items of income or loss. These
revenue and expense items appear in the company’s income statement every year. The
company’s controller, however, has asked for your help in determining the appropriate
treatment of the following nonrecurring transactions that also occurred during 2016 ($ in
000s). All transactions are material in amount.
1. Investments were sold during the year at a loss of $300. Foxworthy also had unrealized
losses of $200 for the year on investments.
2. One of the company’s factories was closed during the year. Restructuring costs incurred
were $2,000.
3. During the year, Foxworthy completed the sale of one of its operating divisions that
qualifies as a component of the entity according to GAAP regarding discontinued
operations. The division had incurred operating income of $800 in 2016 prior to the sale,
and its assets were sold at a loss of $1,800.
4. Foreign currency translation gains for the year totaled $600.
Required:
Prepare Foxworthy’s single, continuous statement of comprehensive income for 2016,
including earnings per share disclosures. Use a multiple-step income statement format. Two
million shares of common stock were outstanding throughout the year.
Chapter 4 The Income Statement, Comprehensive Income, and the
Statement of Cash Flows
Chapter 4 The Income Statement, Comprehensive Income, and the
Statement of Cash Flows
Use the following to answer questions 89 and 90:
The trial balance of Lakewood Inc. included the following accounts as of December 31, 2016:
Debits
Credits
Sales revenue
1,800,000
Interest revenue
80,000
Gain on sale of investments
50,000
Cost of goods sold
1,100,000
Selling expenses
220,000
Write-off of obsolete equipment
30,000
Restructuring costs
150,000
Interest expense
40,000
General and administrative expenses
50,000
Lakewood Inc. had 100,000 shares of stock outstanding throughout the year. Income tax expense has
not yet been accrued. The effective tax rate is 30%.
Chapter 4 The Income Statement, Comprehensive Income, and the
Statement of Cash Flows
89. Required: Prepare a single-step income statement with earnings per share disclosure.
Chapter 4 The Income Statement, Comprehensive Income, and the
Statement of Cash Flows
90. Required: Prepare a multiple-step income statement with earnings per share disclosure.
Chapter 4 The Income Statement, Comprehensive Income, and the
Statement of Cash Flows
Use the following to answer questions 91–93:
The trial balance of Rollins Inc. included the following accounts as of December 31, 2016:
Debits
Credits
Sales revenue
5,900,000
Interest revenue
40,000
Loss on sale of investments
10,000
Unrealized losses on investments
150,000
Foreign currency translation gains
260,000
Cost of goods sold
4,400,000
Selling expenses
400,000
Restructuring costs
180,000
Interest expense
20,000
General and administrative expenses
300,000
Rollins had 100,000 shares of stock outstanding throughout the year. Income tax expense has not yet
been accrued. The effective tax rate is 40%.
91. Required: Prepare a 2016 multiple-step income statement for Rollins Inc. with earnings per
share disclosure.
300,000
180,000
Chapter 4 The Income Statement, Comprehensive Income, and the
Statement of Cash Flows
92. Required: Prepare a 2016 separate statement of comprehensive income for Rollins Inc.
Chapter 4 The Income Statement, Comprehensive Income, and the
Statement of Cash Flows
93. Required: Prepare a 2016 single, continuous statement of comprehensive income for Rollins
Inc. Use a multiple-step income statement format.
Chapter 4 The Income Statement, Comprehensive Income, and the
Statement of Cash Flows