For its fiscal year ending October 31, 2020, Douglas Limited reports the following partial data shown below.

Income before income taxes ................................................£550,000
Income tax expense (30% × £400,000) ..................................120,000
Income before discontinued operations ..............................430,000
Loss on discontinued division ................................................150,000
Net income .............................................................................£280,000

The loss on discontinued division consists of £60,000 loss from operations of the division and £90,000 loss on disposal of the division. The income tax rate is 30% on all items.

Instructions
a. Prepare a correct statement of comprehensive income, beginning with income before income taxes.
b. Explain in memo form why the income statement data are misleading.