The adjusted trial balance for Pansy Paints Ltd. at December 31, 2021, 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. (Ignore earnings per share.)

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

c. Prepare the shareholders? equity section of the balance sheet at December 31, 2021.

Taking It Further

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

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PANSY PAINTS LTD. Adjusted Trial Balance December 31, 2021 Debit Credit Accounts payable $ 54,620 Accounts receivable $ 35,430 Accumulated depreciation-equipment Accumulated depreciation-building Accumulated other comprehensive income (loss)-January 1, 2021 Advertising expense Building 24,300 145,500 7,860 425,000 180,000 Cash Cash dividends-common 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 15,000 255,000 7,500 412,000 29,000 1,000 95,000 850 4,650 Interest expense Merchandise inventory Office expense Other comprehensive income-holding loss on equity investment (before income tax) 83,460 11,000 5,400 Retained earnings–January 1, 2021 Sales 35,030 780,000 $1,303,800 $1,303,800