[Anonymous]

Hey, guys!

I was looking at the newly released AICPA questions and got stuck on this one:

CPABurns

Corp. had the following items:

Sales revenue $45,000

Loss on early extinguishment of bonds 36,000

Realized gain on sale of available-for-sale securities 28,000

Realized gain on sale of available-for-sale securities 17,000

Loss on write-down of inventory 3,100

Which of the following amounts would the statement of comprehensive income report as other

comprehensive income or loss?

a. $11,000 other comprehensive income.

b. $16,900 other comprehensive income.

c. $17,000 other comprehensive loss.

d. $28,100 other comprehensive loss.

Explanation

Choice “c” is correct.

Can someone please explain me how to get to that answer? Thanks a lot and good luck to everyone!

[goodluck2everyone]

honestly I have no idea how they came up with that number. The way I understand, to get comprehensive income you take

Net income

Other comprehensive income (loss)

Comprehensive income.

Net income in this case is 45,000-36,000-3,100 + 28,000 + 17,000= 50900

Other comprehensive income is 0 because the available for sale securities have been sold. If they were unrealized gain (loss), then it would go to OCI.

So yeah this question makes no sense. Can anyone clarify?

BEC- 80
REG- 68, 71, July
AUD- 61 , 84
FAR- -- 75 🙂

[Happy]

Funny picture…

https://tinypic.com/r/2zixbwi/6

REG- 2/12 - 90 | AUD- 4/12 - 94 | BEC- 5/12- 85 | FAR- 8/12 - 82
DONE!!! I used Becker Self Study & Ninja Notes/Audio

[rfern017]

I asked my CPA review course team regarding this question and here is their answer:

Great question. Our editors are actually currently working on crafting answer explanations for all of these. I do know that this one is one that the examiners released with some issues (problems) which is why our editors will have to make some changes to the wording in order for the solution to come out to answer choice (c). This is why you see the apparent duplication of line items. I surmise that the second $17,000 should actually state something along the lines of an unrealized loss on AFS securities. Check back on our website within the next week or two at the most, and I'm sure this specific question will have been modified so as to read correctly and correspond to the suggested solution. I hope this helps, and please be sure to let us know if you have additional questions with any of the assignments or lectures. Good luck on this section of the exam.

[Anonymous]

@ rfern017

Thank you for asking your CPA review course team and your response here! Now this is kind of makes sense.

[snemc889]

This question has to have a mistake in it. My best guess is that the one AFS security should have said unrealized gain for 17,000 not realized. Unrealized go into OCI while the realized goes into the income statement.

FAR 7/25/12 (81)
AUD 8/31/12 (89)
REG 10/13/12
BEC 11/30/12

[Author]

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