Prepare statement of comprehensive income

Assignment Help Financial Accounting

Reference no: EM131261485

(Gain on Sale of Investments and Comprehensive Income) On January 1, 2014, Acker Inc. had the following balance sheet.

ACKER INC.

BALANCE SHEET

AS OF JANUARY 1, 2014

Assets Equity

Cash $ 50,000 Common stock $260,000

Equity investments (available-for-sale) 240,000 Accumulated other comprehensive income 30,000

Total $290,000 Total $290,000

The accumulated other comprehensive income related to unrealized holding gains on available-for-sale securities. The fair value of Acker Inc.’s available-for-sale securities at December 31, 2014, was $190,000; its cost was $140,000. No securities were purchased during the year. Acker Inc.’s income statement for 2014 was as follows. (Ignore income taxes.)

ACKER INC.

INCOME STATEMENT

FOR THE YEAR ENDED DECEMBER 31, 2014

Dividend revenue $ 5,000

Gain on sale of investments 30,000

Net income $35,000

Instructions

(Assume all transactions during the year were for cash.)

(a) Prepare the journal entry to record the sale of the available-for-sale securities in 2014.

(b) Prepare a statement of comprehensive income for 2014.

Reference no: EM131261485

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