Smith Buys and Sells Securities Which It Typically Classifies as Available

question 117

Multiple Choice

Smith buys and sells securities which it typically classifies as available for sale. On December 15, 2009, Smith purchased $500,000 of Jones shares, and elected the fair value option to account for the Jones investment. As of December 31, 2009, the Jones shares had a fair value of $525,000. In the 2009 financial statements, Smith will show (ignore taxes) :

• A)investment income of $25,000 on their income statement.
• B)other comprehensive income of $25,000.
• C)accumulated other comprehensive income of $525,000.
• D)an investment in Jones of $500,000.

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Definitions:

Naturalized

Pertains to a process by which a foreign citizen acquires citizenship of another country, often through a legal procedure after fulfilling certain requirements.

Symbolic Groupings

Social categories or groups that are recognized and differentiated based on cultural, ethnic, or symbolic markers rather than strictly physical or biological characteristics.

Historical Contexts

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Johnson-Reed Act

A U.S. federal law enacted in 1924 that established quotas limiting the number of immigrants allowed from each country, effectively restricting non-European immigration.