A Company Failed to Record Unrealized Gains of $20 Million

question 63

Multiple Choice

A company failed to record unrealized gains of $20 million on its available for sale security investments. Its tax rate is 30%. As a result of this error, comprehensive income would be:

• A)Understated by $14 million.
• B)Understated by $6 million.
• C)Understated by $20 million.
• D)Unaffected.Unrealized gains on securities available for sale are reported net of tax in other comprehensive income.

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