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

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Business

Konner Stout

19 October, 09:56

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

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Brooklynn Weaver · Answer 1

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.