Lunar Eclipse Inc follows IFRS and has the following amounts

Lunar Eclipse Inc. follows IFRS and has the following amounts for the year ended December 31, 2018: gain on sale of FV-NI investments (before tax), $15,000; loss from operation of discontinued division (net of tax), $42,000; income from operations (before tax), $220,000; unrealized holding gain-OCI (net of tax), $12,000; income tax on income from continuing operations, $63,000; loss from disposal of discontinued division (net of tax), $75,000. The unrealized holding gain-OCI relates to investments that are not quoted in an active market.

Required

1. Calculate income from continuing operations. (4 marks)

2. Calculate net income. (4 marks)

3. Calculate other comprehensive income. (4 marks)

4. Calculate comprehensive income. (4 marks)

5. How would your answers to parts (a) to (d) be different if Lunar Eclipse followed ASPE? (3 marks)

Solution

Answer 1
income from operations (before tax),                                           $220,000

income tax on income from continuing operations,                      $63,000

Income from continuing operations                                              $157,000

Answer 2

Calculation of Net income

Income from continuing operations                                        $ 157,000

loss from operation of discontinued division (net of tax)             ($42,000)

loss from disposal of discontinued division (net of tax)      ($75,000)

unrealized holding gain-OCI (net of tax),                                  $12,000

gain on sale of FV-NI investments (before tax)                          $15,000

NET INCOME                                                                     $ 67,000