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Smith buys and sells securities which it typically classifies as available for sale. On December 15, 2011, Smith purchased $500,000 of Jones shares, and elected the fair value option to account for the Jones investment. As of December 31, 2011, the Jones shares had a fair value of $525,000. In the 2011 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.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M973896

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