The following information relates to Pecos Yo Company:
|
Sales |
$15,000 |
|
Cost of goods sold. |
6,000 |
|
Other operating expenses |
2,500 |
|
Interest expense . |
400 |
|
Income tax expense. |
3,000 |
In addition, the following events occurred during the year:
a. Pecos Yo Company has an investment portfolio for long term investment purposes. That portfolio decreased in value by $7,000 during the year.
b. Pecos Yo Company owns a substantial amount of land. During the year, the land increased in value by $11,000.
c. Pecos Yo Company has several foreign subsidiaries. The currencies in the countries where those subsidiaries are located declined in value (relative to the U.S. dollar) during the year. Accordingly, the computed value of the equity of those subsidiaries, in U.S. dollars, decreased by $5,000.
Reqiored
1. Compute Pecos Yo s comprehensive income for the year.
2. Interpretive Question: Is comprehensive income a good measure of the change in a company s value during the year?