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5 January, 17:04

g Consider the following two separate events for a company during the year: 1. Gain on sale of investments = $10. 2. Unrealized gain on investment from 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 increase net income and comprehensive income, ignoring tax effects?

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  1. 5 January, 19:13
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    B.) Net income = $10; Comprehensive income = $30.

    Explanation:

    The computation and effect of these two events increase net income and comprehensive income is shown below:

    Since there is a gain on sale of investment so it increased the net income

    So the net income would be increased by $10

    And, there is an Unrealized gain on investment from an increase in fair value of $20

    So, the comprehensive income increased by

    = $10 + $20

    = $30

    Hence, the correct option is B
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