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Sportswear, Inc

Accounting

Sportswear, Inc. reports the following information for 20x9: sales revenue $2,000,000; CGS $350,000; operating expenses $800,000; and an unrealized holding loss on available-for-sale securities of $50,000. The company paid cash dividends of $10,000. The company's January 1, 20x9 balances were: Common stock, $500,000; accumulated other comprehensive income $30,000; and retained earnings, $300,000. No stock was issued during 20x9.

 

(a) Prepare a statement of comprehensive income, using the one statement approach.

(b) Prepare the stockholders' equity section of Sportswear, Inc.'s Balance Sheet.

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a)  
Sportswear Inc.  
Comprehensive income statement  
For the year ended Dec 31, 20x9  
Sales 2,000,000
Less: Cost of good sold 350,000
Gross Profit 1,650,000
Less: Operating Expenses 800,000
Net operating income 850,000
Less: Tax @0 0
Net Income 850,000
Other comprehensive income 30,000
Unrealized Holding Loss on available for sale securities -50000
Total comprehensive income for the year 830,000

 

b) Sportswear Inc.        
Statement of Stockholders Equity        
         
  Total Retained Earnings Accumulated other comprehensive income Common Stock
Beginning balance 830,000 300,000 30,000 500,000
Net income 850,000 850,000    
Less:        
Unrealized holding loss -50000   -50000  
Cash dividend -10000 -10000    
Ending balance 1,620,000 1,140,000 -20,000 500,000