P The adjusted trial balance for Pansy Paints Ltd. at December 31, 2024, is presented below. Pansy’s income tax rate is 25% and journal entries for income tax expense have not yet been prepared. There were no common share transactions during the year.

Instructions 

a. Prepare a statement of comprehensive income using the all-inclusive format. Use a multi-step format for the profit or loss section. 

b. Prepare a statement of changes in shareholders’ equity. 

c. Prepare the shareholders’ equity section of the balance sheet at December 31, 2024. 

Explain the two methods of preparing a statement of comprehensive income. Is one method better than the other?  

Transcribed Image Text:

Accounts payable Accounts receivable Accumulated depreciation-building Accumulated depreciation equipment Accumulated other comprehensive income (loss)-January 1, 2024 Advertising expense Building Cash Cash dividends-common PANSY PAINTS LTD. Adjusted Trial Balance December 31, 2024 Common shares (18,000 issued) Contributed surplus-reacquisition of common shares Cost of goods sold Depreciation expense Dividends payable Equipment Gain on sale of equipment Income tax expense Income tax payable Interest expense Merchandise inventory Office expense Other comprehensive income-holding loss on equity investment (before income tax) Retained earnings-January 1, 2024 Sales Debit $ 35,430 0 7,860 425,000 180,000 15,000 412,000 29,000 95,000 0 4,650 83,460 11,000 5,400 $1,303,800 Credit $ 54,620 145,500 24,300 255,000 7,500 1,000 850 0 35,030 780,000 $1,303,800