Question

Madsen Company reported the following information for 2020:

Sales revenue$2,040,000
Cost of goods sold1,400,000
Operating expenses220,000
Unrealized holding gain on available-for-sale debt securities120,000
Cash dividends received on the securities8,000
For 2020, Madsen would report other comprehensive income of___________

Answer 1

Other comprehensive income for Madsen Company in 2020 is the unrealized holding gain on available-for-sale debt securities, amounting to $120,000.

Step-by-step explanation:

Other comprehensive income (OCI) is a component of shareholders' equity which includes items that have not been realized and as such are not included in the net income on the income statement.

In the scenario given, the other comprehensive income for Madsen Company would solely include the unrealized holding gain on available-for-sale debt securities since cash dividends received are reported in the net income. Therefore, the other comprehensive income for 2020 is $120,000.