Question

Ortiz Co. reports the following information for 2019: sales revenue $700,000, cost of goods sold $500,000, operating expenses $80,000, and an unrealized holding loss on available-for-sale securities for 2019 of $60,000. It declared and paid a cash dividend of $10,000.

Instructions: compute the comprehensive income for the year ended 31\12\2019.

(When writing your answer do not use commas or sign of the dollar. For example, if your answer is $1,500, write it as 1500)

Answer 1

   Ortiz Co.

Comprehensive Income Statement for the Year Ended 31\12\2019

Sales Revenue 700000

Less:

Cost of Goods Sold 500000

Operating Expenses 80000 580000

Gross Income 120000

Note:  The unrealized loss of $60,000 on available-for-sale securities holding for 2019 will not affect the income statement. The unrealized gains or losses on available-for-sale securities are instead included in Other Comprehensive Income (OCI) classification until they are sold. OCI, which includes unrealized gains and losses from AFS securities, is rolled into "accumulated other comprehensive income" on the balance sheet at the end of the accounting period. Just like the net income accumulated over multiple accounting periods is shown as retained earnings, accumulated other comprehensive income too, is reported in the equity section of the balance sheet.