A Review of the December 31,2006,financial Statements of a Corporation

question 82

Multiple Choice

A review of the December 31,2006,financial statements of a corporation revealed that under the caption "Exceptional and infrequent losses," a total of $130,000 was reported.Further analysis revealed that the $130,000 in losses was comprised of the following items: (1) A loss of $25,000 incurred in the abandonment of equipment formerly used in the business.
(2) An unusual and infrequent occurrence,a loss of $37,500 was sustained as a result of damage to a warehouse by a falling meteorite.
(3) During 2001,several factories were shut down during a major strike by employees.Shutdown expenses totalled $60,000.
(4) Uncollectible accounts receivable of $7,500 were written off as uncollectible.
(5) Foreign exchange - translation gains: $10,000
(6) Decline in market value of Available-for-sale securities: $15,000
Ignoring income taxes,what amount would be shown as Other Comprehensive Income (Loss) on the statement of Comprehensive Income?

• A)($5,000)
• B)$10,000
• C)$15,000
• D)$130,000

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Definitions:

Framing Error

A mistake made when individuals misinterpret the context or perspective of a decision or problem, often influenced by the way information is presented.

Strategic Opportunism

A business strategy focusing on recognizing and capitalizing on opportunities with flexibility while maintaining a core strategic direction.

Lack-of-participation Error

A mistake or bias that occurs due to the absence or minimal involvement of certain groups or individuals.

Representativeness Bias

A cognitive bias where individuals incorrectly estimate the likelihood of an event by comparing it to an existing prototype in their minds.