Solution-Producing financial statements for year one

Producing financial statements for year one

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Reference no: EM133253460

On January 1, Year One, Alba Company buys debt investments of Johnson and Johnson for $13,000. By the end of the year, the investment had risen in value to $16,000. In producing financial statements for Year One, the company incorrectly reported these as trading debt securities when they should have been classified as available for sale. Which of the following is correct?

Reported net income was overstated by $3,000 but comprehensive income was correctly stated.
Reported net income was correctly reported but comprehensive income was understated by $3,000.
Reported net income was understated by $3,000 but comprehensive income was overstated.
Reported net income was correctly reported but comprehensive income was overstated by $3,000.
Reported net income was overstated by $3,000 and comprehensive income was also overstated by $3,000.

Reference no: EM133253460

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Producing financial statements for year one

Reference no: EM133253460

Reference no: EM133253460

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