Palmon Industries Owns an Investment That Experienced a Decline During

question 7

Multiple Choice

Palmon Industries owns an investment that experienced a decline during 2015 that has been judged to be "other than temporary." The investment is held in Palmon's available-for-sale debt portfolio,and Palmon expects to sell the security before recovery of its amortized cost basis less current-period credit loss.It was purchased in March 2014 at a cost of $460,000.At the end of 2014,the fair value of the investment was $520,000 and its amortized cost basis was $454,000.At the end of 2015,the fair value of the investment is $410,000 and its amortized cost is $448,000.What amount of loss will Palmon Industries report on its income statement for the year ending December 31,2015 related to this investment?

• A)an unrealized loss of $110,000.
• B)an unrealized loss of $38,000.
• C)an unrealized loss of $44,000.
• D)an unrealized loss of $50,000.

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