Question

At December 31, 2020, the available-for-sale debt portfolio for Blossom, Inc. is as follows.

Answer 1

Answer:

a.                                      Blossom Inc

                    Statement of Comprehensive Income

                  For the Year Ended December 31, 2020

Particulars                                                               Amount

Net income                                                            $123,000

Other comprehensive income:

Add: Unrealized holding gain                               $3,400

Comprehensive income                                       $126,400

b.                                       Blossom Inc

                    Statement of Comprehensive Income

                  For the Year Ended December 31, 2021

Particulars                                                               Amount

Net income                                                            $142,000

Other comprehensive income:  

Total holding gains in 2021                $41,000

Add: Reclassification adjustment-      $2,700      

for loss included in net income                             $38,300

Comprehensive income                                        $180,300

Note:

Particulars                                                                  Amount

Net amount received from the sale of Security A   $17,900

Less: Cost of Security A                                            $15,200

Loss on the sale of Security A                                ($2,700)