Consider the following two separate events for a company during the year: 1. Gain on sale...
Consider the following two separate events for a company during the year:
1. Gain on sale of investments = $10
2. Unrealized gain on investment om increase in fair value =
$20.
The company reports the unrealized gain as a component of other
comprehensive income. By how much would these two events affect net
income and comprehensive income, ignoring tax effects?
A.) Net income = $10; Comprehensive income = $30.
B.) Net income = $30; Comprehensive income = $20.
C.) Net income = $10; Comprehensive income = $20.
D.) Net income = $30; Comprehensive income = $30.
Homework Answers
Gain on sale of investment is other revenue in calculation of net income.
But Unrealized gain on investment of Increase in fair value is other comprehensive income
So Net income = $10 ; and comprehensive income (10+20) = $30
So answer is a) Net income = $10; Comprehensive income = $30.
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