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Question
On January 1, Butte Company’s valuation allowance for trading investments account has a debit balance of $23,200. On December 31, the cost of the trading securities portfolio was $80,000. The fair value was $98,000. Which of the following would Butte report on the income statement for the current year?
a. an unrealized loss on trading investments, $5,200
b. an unrealized gain on trading investments, $5,200
c. an unrealized gain on trading investments, $18,000
d. an unrealized loss on trading investments, $18,000
Answer
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