Gerogi Company had the following balances for income from continuing operations and pretax gains and losses on December 31: The company's effective tax rate is 40%.What amount should Gerogi Company report as comprehensive income for the year ended December 31?
A)$95,200
B)$104,000
C)$151,200
D)$196,800

Question

Gerogi Company had the following balances for income from continuing operations and pretax gains and losses on December 31:  The company's effective tax rate is 40%.What amount should Gerogi Company report as comprehensive income for the year ended December 31?
A)$95,200 
B)$104,000 
C)$151,200 
D)$196,800

Quizplus · Accepted Answer

Comprehensive income is the sum of income from continuing operations and other comprehensive income. Given that the only information provided is income from continuing operations and pretax gains/losses, we need to calculate other comprehensive income to determine comprehensive income.
Other comprehensive income = Pretax gains/losses - tax on pretax gains/losses
= (100,000 - 56,000) = 44,000
Therefore, comprehensive income = Income from continuing operations + other comprehensive income
= 107,200 + 44,000
= $151,200. Hence the answer is C.

Gerogi Company Had the Following Balances for Income from Continuing