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Accounting

27th Edition
WARREN + 5 others
ISBN: 9781337272094

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BuyFindarrow_forward

Accounting

27th Edition
WARREN + 5 others
ISBN: 9781337272094
Textbook Problem

Comprehensive income

On May 12, Year 1, Chewco Co. purchased 2,000 shares of Jedi Inc. for $112 per share, including the brokerage commission. The Jedi investment was classified as an available-for-sale security. On December 31, Year 1, the fair value of Jedi Inc. was $124 per share.  The net income of Chewco Co. was $50,000 for Year 1.

Compute the comprehensive income for Chewco Co. for the year ended December 31, Year 1.

To determine

Comprehensive income: The financial items which result in changes in the stockholders’ equity, other than stock investments and dividends, are referred to as comprehensive income. Comprehensive income should be reported on income statement, and statement of comprehensive income.

To determine: Comprehensive income for Corporation C, for the year ended December 31, Year 1

Explanation

Determine comprehensive income for Corporation C, for the year ended December 31, Year 1

Corporation C
Income Statement (Partial)
For the Year Ended December 31, Year 1
Net income $50,000
Other comprehensive income (loss):  
  Unrealized gain on available-for-sale investments 24,000
Comprehensive income $74,000

Table (1)

Working Notes:

Compute the unrealized gain (loss) as on December 31...

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