Question

he following is from the 2021 annual report of Kaufman Chemicals, Inc.: Statements of Comprehensive Income Years Ended December 31 2021 2020 2019 Net income $ 790 $ 620 $ 475 Other comprehensive income: Change in net unrealized gains on AFS investments, net of tax of $12, ($10), and $10 in 2021, 2020, and 2019, respectively 24 (17 ) 18 Other (1 ) (1 ) 2 Total comprehensive income $ 813 $ 602 $ 495 Kaufman reports accumulated other comprehensive income in its balance sheet as a component of shareholders' equity as follows: ($ in millions) 2021 2020 Shareholders’ equity: Common stock 300 300 Additional paid-in capital 7,565 7,565 Retained earnings 6,645 6,089 Accumulated other comprehensive income 83 60 Total shareholders’ equity $ 14,593 $ 14,014 Required: 4. From the information provided, determine how Kaufman calculated the $83 million accumulated other comprehensive income in 2021. (Negative amount should be indicated by a minus sign. Enter your answers in millions (i.e., 10,000,000 should be entered as 10).)

Answer 1

Answer: The answer is given below

Step-by-step explanation:

An annual report is a report that is comprehensive about the activities of a company in the previous year. The aim of a company publishing its annual report is to give the shareholders and every other interested person information about activities of the company and its financial performance.

We are told that Kaufman calculated the $83 million accumulated other comprehensive income in 2021. This was calculated as the accumulated other comprehensive income in 2020 plus the change in the net unrealized gains on the AFS investments, the net of tax of $12 in 2021 plus the other net income of 2021. This can be represented mathematically as:

= $60,000,000 + $24,000,000 + (-$1,000,000)

=84,000,000 - $1,000,000

=$83,000,000

= 83 million