Here is one question from the 2013 released question. Can anyone help explain how the answer came out to be $10,000?
Co. has net income of $11,000, a positive $1,000 net cumulative effect of a change in accounting principle, a $3,000 unrealized loss on available-for-sale securities, a positive $2,000 foreign currency translation adjustment, and a $6,000 increase in its common stock. What amount is Co.' comprehensive income?
NI 11,000
+unrealized loss on AFS 3,000 (OCI)
+foreign currency translation adjustment 2,000 (OCI)
=$16,000
-$6,000 increase in common stock
=$10,000
If so, why is the increase in common stock subtracted from NI+OCI to get to CI?
And "positive $1,000 net cumulative effect of a change in accounting principle" is ignored because the retrospective change affects the Retained earnings and not CI?
Thanks.