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QUESTION

If a company experiences an unrealized loss of $9,000 during the current year on a $125,000 investment in available-for-sale securities, what effect

If a company experiences an unrealized loss of $9,000 during the current year on a $125,000 investment in available-for-sale securities, what effect would this loss have on net income, other comprehensive income, and comprehensive income? Assume a 22% tax rate.

  • A
  •  : 
  •  no effect to net income, $7,020 decrease to other comprehensive income, $7,020 decrease to comprehensive income 
  • B
  •  : 
  •  $7,020 decrease to net income, $7,020 decrease to other comprehensive income, $7,020 decrease to comprehensive income 
  • C
  •  : 
  •  $7,020 decrease to net income, no effect to other comprehensive income, $7,020 decrease to comprehensive income 
  • D
  •  : 
  •  $9,000 decrease to net income, no effect to other comprehensive income, $9,000 decrease to comprehensive income 
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