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Question
Yankton Company began the year without an investment portfolio. During the year, it purchased investments classified as trading securities at a cost of $13,000. At the end of the year, the market value of the securities was $11,000. Yankton Company's financial statements for the current year should show
a. a realized loss of $2,000 on the income statement and net trading investments of $13,000 on the balance sheet
b. no loss on the income statement and net trading investments of $13,000 on the balance sheet
c. no loss on the income statement, net trading investments of $11,000, and an unrealized loss of $2,000 as a stockholders’ equity adjustment on the balance sheet
d. an unrealized loss of $2,000 on the income statement and net trading investments of $11,000 on the balance sheet
Answer
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