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Question 9BE

Expert-verified
Intermediate Accounting (Kieso)
Found in: Page 1162

Short Answer

Norton Co. had the following amounts related to its pension plan in 2017. Actuarial liability loss for 2017 $28,000 Unexpected asset gain for 2017 18,000 Accumulated other comprehensive income (G/L) (beginning balance) 7,000 Cr. Determine for 2017 (a) Norton’s other comprehensive income (loss) and (b) comprehensive income. Net income for 2017 is $26,000; no amortization of gain or loss is necessary in 2017.

Comprehensive loss is a term used when the owner of an organization suffers a loss of money due to variation or fluctuations in the financial market. The amount of the organization’s net assets decreases.

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Step by Step Solution

(a)Computation of Norton’s other comprehensive income/loss.

Particulars

Amount

Actuarial liability loss

($28,000)

Add: Unexpected asset gain

$18,000

Other comprehensive loss

($10,000)

(b) Computation of Norton’s comprehensive income.

Particulars

Amount

Net Income

$26,000

Less: Other comprehensive loss

$10,000

Comprehensive Income

$16,000

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