f********y 发帖数: 32 | 1 28. CPA-
Palmyra Co. has net income of $11,000, a positive $1,000 net cumulative
effect of a change in accounting principle, a $3,000 unrealized loss on
available-for-sale securities, a positive $2,000 foreign currency
translation adjustment, and a $6,000 increase in its common stock. What
amount is Palmyra's comprehensive income?
a. $4,000
b. $10,000
c. $11,000
d. $17,000
answer is B
do not know why.
Thank you! | b*****r 发帖数: 130 | | C*****2 发帖数: 64 | 3 I think is 11k+2k-3K
CS unrealized gain doesn't matter. Accounting change affect RE directly. | n***y 发帖数: 1675 | 4 I am reviewing my FAR material, going to take it in a week:
formula: Comprehensive Income = Net Income + Other Comprehensive Income
Per Becker book:
I - net Income -I/S
D - Discontinued - I/S
E - Extraordinary - I/S
A - Accounting changes - goes into Retained Earnings (RE)
Other Comprehensive Income = PUFER
P = Pension adjustment
U = Unrealized gain/loss for available for sale securities
F = Foreign currency translation gain/loss
E = Effective portion of cash flow hedges
R = (IFRS only) revaluation surplus for intangible and fixes assets
So, per your question: (1) Net income counts, (2) accounting changes goes
into RE, didn't count in comprehensive income, (3) unrealized loss for
available for sale securities counts in OCI, (4) foreign currency
translation gain counts, (5) common stock change goes directly into
Stockholders Equity, didn't impact comprehensive income or retained earnings
Thus: 11+2-3 = 10k |
|