During 2016, Jones LLC purchased $51,000 in equity securities as investments. By

Question

During 2016, Jones LLC purchased $51,000 in equity securities as investments. By the end of the year, these securities decreased in value to $41,000 and by the end of 2017, they were valued at $47,000. If the investment securities are identified as trading securities, what would ABC have to do in 2016?

Select one:

a. Record unrealized holding loss of $4,000 in balance sheet.

b. Record unrealized holding gain of $6,000 in income statement.

c. Record unrealized holding loss of $10,000 in income statement.

d. Record unrealized holding loss of $4,000 in income statement.

Explanation / Answer

Solution:-

d. Record unrealized holding loss of $4,000 in income statement.

Explanation:-

$51,000 - $47,000 = $4,000

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