At December 31, 2020, the available-for-sale debt portfolio for Sheridan, Inc. is as follows.Security Cost Fair Value UnrealizedGain (Loss)A $ 17,800 $ 15,500 $( 2,300)B 11,300 14,700 3,400 C 23,700 26,500 2,800 Total $ 52,800 $ 56,700 3,900 Previous fair value adjustment balance—Dr. 300 Fair value adjustment—Dr. $ 3,600 On January 20, 2021, Sheridan, Inc. sold security A for $ 15,600. The sale proceeds are net of brokerage fees.Sheridan, Inc. reports net income in 2020 of $ 117,000 and in 2021 of $ 148,000. Total holding gains (including any realized holding gain or loss) equal $ 47,000 in 2021. Prepare a statement of comprehensive income for 2020, starting with net income.SHERIDAN, INCStatement of Comprehensive Income $ $ The image presents a portion of Sheridan, Inc.'s Statement of Comprehensive Income for the year ending December 31, 2020. - **Net Income** is reported as $148,000. This figure represents the company's total earnings after all expenses have been deducted from revenues for the year.- Below the Net Income section, there are placeholders for additional items or adjustments that contribute to the comprehensive income calculation, although they are not specified in this snippet of the statement.- The **Comprehensive Income** is shown as $52,800. This figure signifies the total income of the company, which includes net income and other comprehensive income items, such as unrealized gains or losses on investments and foreign currency items.No graphs or diagrams are included in this portion of the statement. **Comprehensive Income** Comprehensive income includes all changes in equity during a period except those resulting from investments by owners and distributions to owners. It encompasses both net income and other comprehensive income.**Holding Gains** These are increases in the value of an asset that has not yet been sold. A holding gain becomes realized once the asset is sold.**Holding Loss** This is the loss in value of an asset that has not been sold. Similar to gains, these losses become realized upon sale.**Net Income** Net income is the total profit of a company after all expenses and taxes have been deducted from total revenue. It is also known as the bottom line.**Other Comprehensive Income** Other comprehensive income includes revenues, expenses, gains, and losses that have yet to be realized. This may include items such as foreign currency transaction adjustments and unrealized holding gains or losses.**Reclassification Adjustment for Gain Included in Net Income** This adjustment relates to gains that were included in net income in a prior period but are being removed from other comprehensive income to avoid double counting when realized.**Reclassification Adjustment for Loss Included in Net Income** This adjustment involves losses that were included in net income previously and are now being taken out of other comprehensive income upon realization.**Unrealized Holding Gain** An unrealized holding gain represents the increase in value of an investment or asset that has not yet been sold for cash.**Unrealized Holding Loss** This refers to a decrease in the value of an investment or asset that hasn't been sold yet. These losses affect the financial statements through comprehensive income rather than net income.

Net income is the excess of revenue over expenses. So, any amount of revenues over and above the…

Answered: At December 31, 2020, the…

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

Security	Cost	Fair Value	Unrealized Gain (Loss)
A	$ 17,800	$ 15,500	$( 2,300	)
B	11,300	14,700	3,400
C	23,700	26,500	2,800
Total	$ 52,800	$ 56,700	3,900
Previous fair value adjustment balance—Dr.	300
Fair value adjustment—Dr.	$ 3,600