Laurent Invested $19,000 in Shares of DEF During Year 1,classifying

question 25

Multiple Choice

Laurent invested $19,000 in shares of DEF during Year 1,classifying the investment as available-for-sale.The fair value of this investment was $17,500 and $22,000 at the end of Year 1 and Year 2,respectively.What is the unrealized gain or loss for this investment at the end of Year 1 and how is it reported?

• A)Unrealized Loss of $1,500,reported as part of Other Comprehensive Income.
• B)Unrealized Loss of $1,500,reported as part of Net Income.
• C)Unrealized Gain of $3,000,reported as part of Other Comprehensive Income.
• D)Unrealized Gain of $3,000,reported as part of Net Income.

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Definitions:

Volatile

Characterizes substances that easily vaporize at normal temperatures and pressures, often referring to liquids with high vapor pressures.

RAM

Random Access Memory, a type of computer memory that can be accessed randomly, any byte of memory can be accessed without touching the preceding bytes.

Forward Bias

In electronics, a condition where the positive end of a voltage source is connected to the p-type material and the negative end to the n-type material of a semiconductor, allowing current flow.

Bipolar Transistor

A transistor that operates like a switched diode. It contains base, emitter, and collector terminals and can have NPN or PNP biasing.