Question 15
At December 31, 2017, the available-for-sale debt portfolio forStellar, Inc. is as follows.
Security
Cost
Fair Value
Unrealized
Gain (Loss)
A
$158,375
$135,750
$(22,625
)
B
113,125
126,700
13,575
C
208,150
230,775
22,625
Total
$479,650
$493,225
13,575
Previous fair value adjustment balanceâDr.
3,620
Fair value adjustmentâDr.
$9,955
On January 20, 2018, Stellar, Inc. sold security A for $136,655.The sale proceeds are net of brokerage fees.
StellarInc. reports net income in 2017 of $1,086,000 and in 2018 of$1,267,000. Total holding gains (including any realized holdinggain or loss) equal $362,000 in 2018.
Prepare a statement of comprehensive income for 2017, startingwith net income.
STELLAR, INC
Statement of Comprehensive Income
For the Year Ended December 31, 2017
Comprehensive IncomeHolding GainsHolding LossNet IncomeOtherComprehensive IncomeReclassification Adjustment for Gain Includedin Net IncomeReclassification Adjustment for Loss Included in NetIncomeUnrealized Holding GainUnrealized Holding Loss
$
Comprehensive IncomeHolding GainsHolding LossNet IncomeOtherComprehensive IncomeReclassification Adjustment for Gain Includedin Net IncomeReclassification Adjustment for Loss Included in NetIncomeUnrealized Holding GainUnrealized Holding Loss
Comprehensive IncomeHolding GainsHolding LossNet IncomeOtherComprehensive IncomeReclassification Adjustment for Gain Includedin Net IncomeReclassification Adjustment for Loss Included in NetIncomeUnrealized Holding GainUnrealized Holding Loss
Comprehensive IncomeHolding GainsHolding LossNet IncomeOtherComprehensive IncomeReclassification Adjustment for Gain Includedin Net IncomeReclassification Adjustment for Loss Included in NetIncomeUnrealized Holding GainUnrealized Holding Loss
$
Prepare a statement of comprehensive income for 2018, startingwith net income.
STELLAR, INC
Statement of Comprehensive Income
For the Year Ended December 31, 2018
Comprehensive IncomeHolding GainsHolding LossNet IncomeOtherComprehensive IncomeReclassification Adjustment for Gain Includedin Net IncomeReclassification Adjustment for Loss Included in NetIncomeUnrealized Holding GainUnrealized Holding Loss
$
Comprehensive IncomeHolding GainsHolding LossNet IncomeOtherComprehensive IncomeReclassification Adjustment for Gain Includedin Net IncomeReclassification Adjustment for Loss Included in NetIncomeUnrealized Holding GainUnrealized Holding Loss
Comprehensive IncomeHolding GainsHolding LossNet IncomeOtherComprehensive IncomeReclassification Adjustment for Gain Includedin Net IncomeReclassification Adjustment for Loss Included in NetIncomeUnrealized Holding GainUnrealized Holding Loss
$
AddLess
:
Comprehensive IncomeHolding GainsHolding LossNet IncomeOtherComprehensive IncomeReclassification Adjustment for Gain Includedin Net IncomeReclassification Adjustment for Loss Included in NetIncomeUnrealized Holding GainUnrealized Holding Loss
Comprehensive IncomeHolding GainsHolding LossNet IncomeOtherComprehensive IncomeReclassification Adjustment for Gain Includedin Net IncomeReclassification Adjustment for Loss Included in NetIncomeUnrealized Holding GainUnrealized Holding Loss
$
Ending Balance, December 31, 2018Amount Reclassified fromAccumulated Other Comprehensive IncomeUnrealized HoldingGainAccumulated Other Comprehensive IncomeBeginning Balance,January 1, 2018Current Period Other Comprehensive income
Beginning Balance, January 1, 2018Current Period OtherComprehensive incomeUnrealized Holding GainAccumulated OtherComprehensive IncomeAmount Reclassified from Accumulated OtherComprehensive IncomeEnding Balance, December 31, 2018
$
Unrealized Holding GainBeginning Balance, January 1, 2018EndingBalance, December 31, 2018Current Period Other ComprehensiveincomeAmount Reclassified from Accumulated Other ComprehensiveIncomeAccumulated Other Comprehensive Income
$
Beginning Balance, January 1, 2018Accumulated OtherComprehensive IncomeUnrealized Holding GainCurrent Period OtherComprehensive incomeEnding Balance, December 31, 2018AmountReclassified from Accumulated Other Comprehensive Income
Current Period Other Comprehensive incomeBeginning Balance,January 1, 2018Ending Balance, December 31, 2018Amount Reclassifiedfrom Accumulated Other Comprehensive IncomeUnrealized HoldingGainAccumulated Other Comprehensive Income
Current Period Other Comprehensive incomeAmount Reclassifiedfrom Accumulated Other Comprehensive IncomeUnrealized HoldingGainAccumulated Other Comprehensive IncomeEnding Balance, December31, 2018Beginning Balance, January 1, 2018
$
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