The Lo Company imports and sells Chinese furniture in the United States. Its new accountant has been assigned the task of preparing the income statement. She knows that the FASB is now requiring that certain unrealized gains and losses be reported as part of comprehensive income. She has the following information available for the year just ended.

1. Loss on cumulative effect of change of depreciation method, net of tax ..$ 840

2. Gain from disposal of discontinued operations, net of tax .......3,500

3. Cost of goods sold ...................... 180,000

4. Revenue received in advance ..................2,500

5. Work in process inventory ................... 135,000

6. Interest expense ....................... 4,000

7. Provision for income tax ..................... 11,700

8. Sale of treasury stock at a price greater than cost .......... 5,050

9. Sales revenue ........................ 250,000

10. Unrealized gain on increase of market value of investment ...... 1,240

11. Sale of stock to investors ................... 60,300

12. General and administrative expense ................ 27,000

13. Extraordinary gain on retirement of debt, net of tax ......... 4,200

14. Unrealized loss on foreign currency translation

(regarding foreign subsidiary) .................. 3,600

15. Cash received from customers .................. 75,000

16. Dividends paid to shareholders ................ 8,000

Required

A. From the information given above, decide which items should appear in the income statement, which would appear on a separate statement of comprehensive income, and which would not appear on either. If an item does not appear on either statement, indicate where it would be found. Also indicate which are transactions with owners.

B. Using the information above, prepare an income statement and a separate statement of comprehensive income.