Let's prepare a **statement of comprehensive income for 2025** for Crane, Inc., **starting with net income** and including the unrealized gain/loss on available-for-sale debt securities. ### 1. **Net Income** Given: **2025 Net Income:** $124,000 --- ### 2. **Other Comprehensive Income (OCI): Unrealized Gains/Losses** #### Calculation of 2025 Unrealized Gain/Loss - **Total Unrealized Gain (Loss) for 2025:** = **Fair Value Total** - **Cost Total** = $55,800 - $52,600 = **$3,200** (net unrealized gain for the year) - **Previous Fair Value Adjustment Balance (Dr.):** $300 - **Ending Fair Value Adjustment (Dr.):** $2,900 ##### **OCI for 2025:** Unrealized holding gain/loss for the year = Change in fair value adjustment = Ending adjustment - Previous adjustment = $2,900 (Dr.) - $300 (Dr.) = **$2,600 (Dr.)** But since this is a *debit*, it means it is an expense (loss). However, looking at the individual securities, the net amount is a **gain**: $3,200, so let's clarify: The **change** in fair value adjustment account is the amount reported in OCI. - **Fair value adjustment needed at year-end:** $2,900 (Dr.) - **Previous balance:** $300 (Dr.) - **Increase during the year (recognized in OCI):** $2,900 - $300 = **$2,600** (increase in loss = loss in OCI). But the portfolio as a whole has a net unrealized **gain** of $3,200. Since the balance is a *debit*, it means a net loss is being recognized. But the table shows a net gain of $3,200. Let's reconcile: - **Unrealized Gain/Loss:** = (Fair Value - Cost) for each security, summed: - A: $14,000 - $18,000 = ($4,000) - B: $15,400 - $12,000 = $3,400 - C: $26,400 - $22,600 = $3,800 - Total: ($4,000) + $3,400 + $3,800 = **$3,200** So, the net unrealized gain is $3,200. The fair value adjustment is a contra-asset account, so the adjustment is: **OCI for 2025 = $3,200 - $300 = $2,900 gain** (increase in fair value adjustment from $300 to $2,900). --- ### 3. **Total Comprehensive Income** **Total Comprehensive Income = Net Income + Other Comprehensive Income** --- ### **Crane, Inc.** ### **Statement of Comprehensive Income (Partial)** ### **For the Year Ended December 31, 2025** | Description | Amount | |------------------------|-------------| | **Net Income** | $124,000 | | **Other Comprehensive Income:** | | | Unrealized holding gain on available-for-sale debt securities | **$2,900** | | **Total Comprehensive Income** | **$126,900** | --- **Summary:** - Net Income: $124,000 - OCI: $2,900 (Unrealized holding gain) - Total Comprehensive Income: $126,900 --- **If you need the journal entries or the 2026 statement, just let me know!**

The **Statement of Comprehensive Income** is a financial statement that provides a complete picture of a company's financial performance over a specific period. It combines the traditional income statement, which reports net income, with other comprehensive income (OCI), capturing gains and losses that are not realized through operations but reflect changes in the value of certain assets and liabilities. **Key Components:** 1. **Net Income:** This is the profit or loss earned during the period, derived from the company's core operations, revenues, and expenses. 2. **Other Comprehensive Income (OCI):** This includes items that are not included in net income but affect shareholders' equity. Examples include: - Unrealized gains or losses on available-for-sale securities - Foreign currency translation adjustments - Pension plan gains or losses 3. **Total Comprehensive Income:** The sum of net income and OCI, representing the total change in equity resulting from all aspects of the company's performance during the period. **Purpose:** The statement provides transparency by showing both the company's operational results and the unrealized gains or losses that could impact future periods. It helps investors and analysts understand the full scope of the company's financial health beyond just net income. **In summary:** The Statement of Comprehensive Income presents a broader view of a company's financial performance, capturing both realized and unrealized gains and losses, thereby offering a more complete measure of changes in equity during the period.