Answer:
A.) Net income = $(30); Comprehensive income = $(10).
Explanation:
First, the multiple choices to the question
A.) Net income = $(30); Comprehensive income = $(10).
B.) Net income = $(30); Comprehensive income = $20.
C.) Net income = $0; Comprehensive income = $(10).
D.) Net income = $(10); Comprehensive income = $20.
The question is to determine the effect of the two events listed on the Net Income as well as the comprehensive income
First, we look at event one:
The loss of sales of investment = #30
The effect of this is to debit the income statement because it is a net loss of $30. It brings a reduction to the income side. Income will usually have a credit balance, but a net loss reduces income therefore, it will be debited.
Second, the Unrealized gain on investment from increase in fair value = $20
The effect is $10 which represents $30 from the loss - $20 from the unrealised gain. It will however, also decrease the comprehensive income by the $10.
