Consider the following two separate events for a company during the year:
1. Loss on sale of investments = $30.
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 affect net income and comprehensive income, ignoring tax effects?
Multiple Choice
Net income = $(30); Comprehensive income = $20.
Net income = $(30); Comprehensive income = $(10).
Net income = $0; Comprehensive income = $(10).
Net income = $(10); Comprehensive income = $20.
Answer
Net income = $(30); Comprehensive income = $(10).
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