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An inexperienced accountant for Sarasota Corp. showed the following in the income statement: income before income...

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Accounting

An inexperienced accountant for Sarasota Corp. showed thefollowing in the income statement: income before income taxes$359,000 and unrealized gain on available-for-sale securities(before taxes) $88,800. The unrealized gain on available-for-salesecurities and income before income taxes are both subject to a 28%tax rate. Prepare a correct statement of comprehensive income.

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SARASOTA CORP.
Partial Statement of Comprehensive Income
Income Before Income Taxes                                                                                                          (a) $359,000
Income Tax Expense                            [$359,000 x 28%]                                                               (b) $100,520
Net Income / (Loss)                                                                                                                         (c = a - b) $258,480
Other Comprehensive Income
   Unrealized Holding Gain on Available-for-Sale Securities    [Refer working note below]             (d) $63,936
Comprehensive Income                                                                                                                       (c + d) $322,416

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Working note - Calculation of unrealized gain on available-for-sale Securities, net of income taxes
Unrealized gain on available-for-sale securities (before taxes) $88,800
Less: Income tax      [$88,800 x 28%] $24,864
Unrealized gain on available-for-sale Securities, net of income taxes $63,936

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