Question

A company reports the following information as of December 31: Sales revenue $800,000 Cost of goods sold 600,000 Operating expenses 90,000 Unrealized holding gain on available-for-sale debt securities, net of tax 30,000 What amount should the company report as comprehensive income as of December 31

Answer 1

Answer:

Comprehensive income as of 31st December is $320,000.

Explanation:

Comprehensive income = Operating profits + Unrelated profits.

The value of unrelated profit is the profit realised as a result of the disposal of debt securities, which does not form part of the core operation of the company which is therefore unrelated.

Comprehensive income is therefore=(Sales revenue - Cost of goods sold + Operating expenses) + Net of tax.

Comprehensive profit =($800,000 - $600,000 + $90,000) + $30,00

= $320,000.

Comprehensive income as of 31st December, is therefore $320,000.