Smith Buys and Sells Securities

Smith buys and sells securities. On December 15, 2018, Smith purchased $500,000 of Jones shares and elected the fair value option to account for the Jones investment. As of December 31, 2018, the Jones shares had a fair value of $525,000. In the 2018 financial statements, Smith will report (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.

Correct Answer:

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Access For Free