Question

Burns Corp. had the following items:
Sales revenue $45,000
Loss on early extinguishment of bonds 36,000
Realized gain on sale of available-for-sale securities 28,000
Unrealized holding loss on available-for-sale securities 17,000
Loss on write-down of inventory 3,100
Which of the following amounts would the statement of comprehensive income report as other comprehensive income or loss?

A. $11,000 other comprehensive income.
B. $16,900 other comprehensive income.
C. $17,000 other comprehensive loss.
D. $28,100 other comprehensive loss.

Answer 1

Answer:

Option D is correct because the only item that relates to Income statement is Sales Revenue of $45000 and the remainder transactions net effect must go to Comprehensive Income statement.

Net effect = - $36k + $28k - $17k -$3.1k = $28.1 Loss

This net effect realized during the year in the Comprehensive Income statement because these transaction does not directly relate to core operation of the entity.