Smith Buys and Sells Securities, Which It Typically Classifies as Available

question 185

Multiple Choice

Smith buys and sells securities, which it typically classifies as available for sale. On December 15, 2013, Smith purchased $500,000 of Jones shares and elected the fair value option to account for the Jones investment. As of December 31, 2013, the Jones shares had a fair value of $525,000. In the 2013 financial statements, Smith will show (ignore taxes) :

• A)Investment income of $25,000 in its 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.