FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Answer is d. Unrealized gain of $25,000 Please explain the reasoning and calculations
14. On its December 31, 2017, balance sheet, Trump Company reported its investment in equity
securities, which had cost $600,000, at fair value of $560,000. The investment is less than
1% of shares outstanding of the investee company. At December 31, 2018, the fair value of
the securities was $585,000. What should Trump report on its 2018 income statement as a
result of the increase in fair value of the investments in 2018?
a. $0.
b. Unrealized loss of $15,000.
c. Realized gain of $25,000.
d. Unrealized gain of $25,000.
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Transcribed Image Text:14. On its December 31, 2017, balance sheet, Trump Company reported its investment in equity securities, which had cost $600,000, at fair value of $560,000. The investment is less than 1% of shares outstanding of the investee company. At December 31, 2018, the fair value of the securities was $585,000. What should Trump report on its 2018 income statement as a result of the increase in fair value of the investments in 2018? a. $0. b. Unrealized loss of $15,000. c. Realized gain of $25,000. d. Unrealized gain of $25,000.
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