During its fiscal year, a Pension Trust Fund buys 1,000 shares of stock, for whi

Question

During its fiscal year, a Pension Trust Fund buys 1,000 shares of stock, for which it pays $33,000. At year end, the stock has a fair value of $28,000. How should this fact be reported in the Trust Fund's financial statements?

a. the investment should be reported at a value of $33,000
b. the investment should be reported at a value of $33,000, and the loss in market value should be reported in a footnote
c. the investment should be reported at a value of $30,500
d. the investment should be reported at a value of $28,000

Explanation / Answer

The above answer is wrong. It is d.: The investment should be reported at a value of $28,000

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