Trayer Corporation has income from continuing operations of $290,000 for the year ended December 31, 2017. It also has the following items (before considering income taxes). 1. An unrealized loss of $80,000 on available-for-sale securities. 2. A gain of $30,000 on the discontinuance of a division (comprised of a $10,000 loss from operations and a $40,000 gain on disposal). 3. A correction of an error in last year’s financial statements that resulted in a $20,000 understatement of 2016 net income. Assume all items are subject to income taxes at a 20% tax rate. Prepare a statement of comprehensive income, beginning with income from continuing operations. TRAYER CORPORATION Partial Statement of Comprehensive Income choose the accounting period.

Solution: Loss from operations = $10,000 × 20% = $2,000 ($10,000 - $2,000 = $8,000)
Gain from disposal = $40,000 × 20% = $8,000 ($40,000 - $8,000 = $32,000)
Unrealized holding loss on available-for-sale securities = $80,000 × 20% = $16,000 ($80,000 - $16,000 = $64,000)

Gains and losses from discontinued operations and other comprehensive income should be reported net of their income tax effects)