Question

The trial balance of Rollins Inc. included the following accounts as of December 31, 2021:_______.

Debits Credits
Sales revenue 5,900,000
Interest revenue 40,000
Loss on sale of investments 10,000
Loss on debt investments 160,000
Gain on projected benefit obligation 260,000
Cost of goods sold 4,400,000
Selling expense 400,000
Restructuring costs 190,000
Interest expense 20,000
General and administrative expense 300,000
The loss on debt investments represents a decrease in the fair value of debt securities and is classified as part of other comprehensive income. Rollins had 100,000 shares of stock outstanding throughout the year. Income tax expense has not yet been accrued. The effective tax rate is 25%.
Required:
Prepare a 2021 separate statement of comprehensive income for Rollins Inc. (Amounts to be deducted should be indicated with a minus sign.)

Answer 1

Rollins Inc.

ROLLINS INC.

Statement of Comprehensive Income

For the year ended December 31, 2021:

Sales revenue $5,900,000

Cost of goods sold -4,400,000

Gross profit $1,500,000

Selling expense 400,000

General and administrative expense 300,000 -700,000

Operating Income $800,000

Interest revenue 40,000

Interest expense -20,000 20,000

Income before taxes $820,000

Income tax (25%) -205,000

Income after tax $615,000

Other comprehensive income:

Gain on projected benefit obligation 260,000

Restructuring costs -190,000

Loss on sale of investments -10,000

Loss on debt investments -160,000 -100,000

Other comprehensive income $515,000

Step-by-step explanation:

Data and Calculations:

Trial Balance as of December 31, 2021:

Debits Credits

Sales revenue 5,900,000

Cost of goods sold 4,400,000

Interest revenue 40,000

Interest expense 20,000

Loss on sale of investments 10,000

Loss on debt investments 160,000

Gain on projected benefit obligation 260,000

Selling expense 400,000

Restructuring costs 190,000

General and administrative expense 300,000