A Company Failed to Record Unrealized Gains of $20 Million

Multiple Choice

A company failed to record unrealized gains of $20 million on its available for sale security investments. Its tax rate is 30%. As a result of this error, comprehensive income would be:

A) Understated by $14 million.
B) Understated by $6 million.
C) Understated by $20 million
D) UnaffecteD.Unrealized gains on securities available for sale are reported net of tax in other comprehensive income.