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4 August, 16:16

The Massoud Consulting Group reported net income of $1,380,000 for its fiscal year ended December 31, 2021. In addition, during the year the company experienced a positive foreign currency translation adjustment of $370,000 and an unrealized loss on debt securities of $40,000. 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. (Amou

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  1. 4 August, 17:48
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    The preparation of the separate statement of comprehensive income for 2021 is shown below:

    Positive foreign currency translation adjustment $370,000

    Less - tax expense on foreign currency translation adjustment ($92,500)

    Less: unrealized loss on debt securities ($40,000)

    Add: tax expense on unrealized loss $10,000

    Net comprehensive income $247,500

    We simply multiply the 25% tax rate with respective item to find out the tax expense
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