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25 January, 10:34

The Massoud Consulting Group reported net income of $1,376,000 for its fiscal year ended December 31, 2021. In addition, during the year the company experienced a positive foreign currency translation adjustment of $350,000 and an unrealized loss on debt securities of $90,000. The company's effective tax rate on all items affecting comprehensive income is 25%. Each component of other comprehensive income is displayed net of tax. Required: Prepare a separate statement of comprehensive income for 2021. (Amount to be deducted should be indicated with a minus sign.)

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  1. 25 January, 13:03
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    Statement of Comprehensive Income for 2021;

    Net Income = $1,376,000

    Other Comprehensive income (loss) : -

    Foreign Currency Translation Gain (Net of Tax):

    = $350,000 - 25% of $350,000

    = $350,000 - $87,500

    = $262,500

    Unrealized losses on investment securities (Net of tax):

    = $90,000 - 25% of $90,000

    = $90,000 - $22,500

    = ($67,500)

    Total other Comprehensive income:

    = Foreign Currency Translation Gain (Net of Tax) + Unrealized losses on investment securities (Net of tax)

    = $262,500 + ($67,500)

    = $262,500 - $67,500

    = $195,000

    Comprehensive Income = Net Income + Total other Comprehensive income

    = $1,376,000 + $195,000

    = $1,571,000
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