Question
At December 31, 2020, the available-for-sale debt portfolio for Pharoah, Inc. is as follows. Security Cost Fair Value Unrealized Gain (Loss) A $17,400 $14,900 $(2,500
At December 31, 2020, the available-for-sale debt portfolio for Pharoah, Inc. is as follows.
| Security | Cost | Fair Value | Unrealized Gain (Loss) | ||||
| A | $17,400 | $14,900 | $(2,500 | ) | |||
| B | 11,300 | 15,500 | 4,200 | ||||
| C | 22,200 | 25,900 | 3,700 | ||||
| Total | $50,900 | $56,300 | 5,400 | ||||
| Previous fair value adjustment balanceDr. | 400 | ||||||
| Fair value adjustmentDr. | $5,000 | ||||||
On January 20, 2021, Pharoah, Inc. sold security A for $15,000. The sale proceeds are net of brokerage fees. Pharoah, Inc. reports net income in 2020 of $119,000 and in 2021 of $147,000. Total holding gains (including any realized holding gain or loss) equal $42,000 in 2021.
(a)
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Your answer is correct.
Prepare a statement of comprehensive income for 2020, starting with net income.
| PHAROAH, INC Statement of Comprehensive Income December 31, 2020For the Month Ended December 31, 2020For the Year Ended December 31, 2020 | ||||
| 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 | $ | |||
| 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 | ||||
| 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 | ||||
| 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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(b)
Prepare a statement of comprehensive income for 2021, starting with net income.
| PHAROAH, INC Statement of Comprehensive Income For the Month Ended December 31, 2021December 31, 2021For the Year Ended December 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 | $ | |||
| AddLess: 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 incomeBeginning Balance, January 1, 2021Accumulated Other Comprehensive IncomeUnrealized Holding GainsAmount Reclassified from Accumulated Other Comprehensive IncomeEnding Balance, December 31, 2021 | ||||
| Ending Balance, December 31, 2021Current Period Other Comprehensive incomeAccumulated Other Comprehensive IncomeBeginning Balance, January 1, 2021Unrealized Holding GainsAmount Reclassified from Accumulated Other Comprehensive Income | $ | |||
| Current Period Other Comprehensive incomeAccumulated Other Comprehensive IncomeEnding Balance, December 31, 2021Amount Reclassified from Accumulated Other Comprehensive IncomeBeginning Balance, January 1, 2021Unrealized Holding Gains | $ | |||
| Beginning Balance, January 1, 2021Unrealized Holding GainsAmount Reclassified from Accumulated Other Comprehensive IncomeCurrent Period Other Comprehensive incomeEnding Balance, December 31, 2021Accumulated Other Comprehensive Income | ||||
| Unrealized Holding GainsBeginning Balance, January 1, 2021Current Period Other Comprehensive incomeAmount Reclassified from Accumulated Other Comprehensive IncomeEnding Balance, December 31, 2021Accumulated Other Comprehensive Income | ||||
| Accumulated Other Comprehensive IncomeAmount Reclassified from Accumulated Other Comprehensive IncomeEnding Balance, December 31, 2021Current Period Other Comprehensive incomeUnrealized Holding GainsBeginning Balance, January 1, 2021 | $ | |||
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