- CFA Exams
- CFA Level I Exam
- Study Session 7. Financial Reporting and Analysis (2)
- Reading 21. Understanding Income Statements
- Subject 9. Comprehensive Income
CFA Practice Question
Assume a company's beginning shareholders' equity is $100 million, its net income for the year is $15 million, its cash dividends for the year are $7 million, and there was no issuance or repurchases of common stock. The company's actual ending shareholders' equity is $115 million. What amount has bypassed the net income calculation by being classified as other comprehensive income?
B. $7 million
C. $15 million
A. $0
B. $7 million
C. $15 million
Correct Answer: B
$115 - (100 + 15 - 7) = $7
User Contributed Comments 4
User | Comment |
---|---|
schweitzdm | I am not quite sure about what is at play here. Anyone care to explain? It seems so simple, I must be over thinking it |
bgbigelow | The shareholders equity should be previous period equity + net income minus dividends. Since the total reported is 115 M then there must have been an additional 7 million not reported in net income that shows up in shareholders equity. |
tomalot | $8m? 7+8 =15 |
farhan92 | end equity=begin equity +ni -divs 115 = 100 +15 -7 115=108 the difference of 7 not included must be reported in comp inc. |