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Homework answers / question archive / At December 31, 2020, the available-for-sale debt portfolio for Crane, Inc
At December 31, 2020, the available-for-sale debt portfolio for Crane, Inc. is as follows.
|
Security |
Cost |
Fair Value |
Unrealized |
||||
| A | $17,600 | $16,000 | $(1,600 | ) | |||
| B | 11,100 | 15,500 | 4,400 | ||||
| C | 24,000 | 25,800 | 1,800 | ||||
| Total | $52,700 | $57,300 | 4,600 | ||||
| Previous fair value adjustment balance—Dr. | 500 | ||||||
| Fair value adjustment—Dr. | $4,100 | ||||||
On January 20, 2021, Crane, Inc. sold security A for $16,100. The sale proceeds are net of brokerage fees.
Crane, Inc. reports net income in 2020 of $124,000 and in 2021 of $147,000. Total holding gains (including any realized holding gain or loss) equal $43,000 in 2021.
Prepare a statement of comprehensive income for 2020, starting with net income.
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CRANE, INC |
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Comprehensive IncomeHolding GainsHolding LossNet IncomeOther Comprehensive IncomeReclassification Adjustment for Gain Included in Net IncomeReclassification Adjustment for Loss Included in Net IncomeUnrealized Holding GainUnrealized Holding Loss |
$ |
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Comprehensive IncomeHolding GainsHolding LossNet IncomeOther Comprehensive IncomeReclassification Adjustment for Gain Included in Net IncomeReclassification Adjustment for Loss Included in Net IncomeUnrealized Holding GainUnrealized Holding Loss |
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Comprehensive IncomeHolding GainsHolding LossNet IncomeOther Comprehensive IncomeReclassification Adjustment for Gain Included in Net IncomeReclassification Adjustment for Loss Included in Net IncomeUnrealized Holding GainUnrealized Holding Loss |
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Comprehensive IncomeHolding GainsHolding LossNet IncomeOther Comprehensive IncomeReclassification Adjustment for Gain Included in Net IncomeReclassification Adjustment for Loss Included in Net IncomeUnrealized Holding GainUnrealized Holding Loss |
$ |
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Prepare a statement of comprehensive income for 2021, starting with net income.
CRANE, INC
Statement of Comprehensive Income
For the Year Ended December 31, 2021For the Month Ended December 31, 2021December 31, 2021
Comprehensive IncomeNet IncomeOther Comprehensive IncomeReclassification Adjustment for Gain Included in Net IncomeReclassification Adjustment for Loss Included in Net IncomeUnrealized Holding GainsUnrealized Holding Loss
$
Comprehensive IncomeNet IncomeOther Comprehensive IncomeReclassification Adjustment for Gain Included in Net IncomeReclassification Adjustment for Loss Included in Net IncomeUnrealized Holding GainsUnrealized Holding Loss
Comprehensive IncomeNet IncomeOther Comprehensive IncomeReclassification Adjustment for Gain Included in Net IncomeReclassification Adjustment for Loss Included in Net IncomeUnrealized Holding GainsUnrealized Holding Loss
$
Add Less: Comprehensive IncomeNet IncomeOther Comprehensive IncomeReclassification Adjustment for Gain Included in Net IncomeReclassification Adjustment for Loss Included in Net IncomeUnrealized Holding GainsUnrealized Holding Loss
Comprehensive IncomeNet IncomeOther Comprehensive IncomeReclassification Adjustment for Gain Included in Net IncomeReclassification Adjustment for Loss Included in Net IncomeUnrealized Holding GainsUnrealized Holding Loss
$
Current Period Other Comprehensive income accumulated Other Comprehensive IncomeBeginning Balance, January 1, 2021Ending Balance, December 31, 2021Amount Reclassified from Accumulated Other Comprehensive IncomeUnrealized Holding Gains
Beginning Balance, January 1, 2021Amount Reclassified from Accumulated Other Comprehensive IncomeCurrent Period Other Comprehensive incomeEnding Balance, December 31, 2021Accumulated Other Comprehensive IncomeUnrealized Holding Gains
$
Accumulated Other Comprehensive IncomeCurrent Period Other Comprehensive income amount Reclassified from Accumulated Other Comprehensive IncomeEnding Balance, December 31, 2021Beginning Balance, January 1, 2021Unrealized Holding Gains
$
Beginning Balance, January 1, 2021Unrealized Holding GainsAccumulated Other Comprehensive IncomeAmount Reclassified from Accumulated Other Comprehensive IncomeEnding Balance, December 31, 2021Current Period Other Comprehensive income
Accumulated Other Comprehensive IncomeEnding Balance, December 31, 2021Unrealized Holding GainsAmount Reclassified from Accumulated Other Comprehensive IncomeBeginning Balance, January 1, 2021Current Period Other Comprehensive income
Amount Reclassified from Accumulated Other Comprehensive IncomeEnding Balance, December 31, 2021Current Period Other Comprehensive income accumulated Other Comprehensive IncomeBeginning Balance, January 1, 2021Unrealized Holding Gains
Requirement 1: Prepare a statement of comprehensive income for 2020 as follows
| C Inc | ||
| Statement of Comprehensive Income | ||
| For the Year Ended December 31, 2020 | ||
| Particulars | Amount | |
| Net income | $124,000 | |
| Other comprehensive income: | ||
| Add: Unrealized holding gain | $4,100 | |
| Comprehensive income | $128,100 |
Requirement 2: Prepare a statement of comprehensive income for 2021 as follows
| C Inc | ||
| Statement of Comprehensive Income | ||
| For the Year Ended December 31, 2021 | ||
| Particulars | Amount | Amount |
| Net income | $147,000 | |
| Other comprehensive income: | ||
| Total holding gains in 2021 | $43,000 | |
| Add: Reclassification adjustment for loss included in net income | $1,500 | $44,500 |
| Comprehensive income | $191,500 |
| C Inc | ||
| Notes to Financial Statements | ||
| Accumulated Other Comprehensive Income: | ||
| Particulars | Amount | Amount |
| Beginning balance, January 1, 2021 | $4,100 | |
| Other comprehensive income for the current period | $43,000 | |
| Add: Amount reclassified from accumulated other comprehensive income | $1,500 | $44,500 |
| Ending balance, December 31, 2021 | $48,600 |
Notes:
| Particulars | Amount |
| Net amount received from the sale of Security A | $16,100 |
| Deduct: Cost of Security A | $17,600 |
| Loss on the sale of Security A | ($1,500) |
