Yankton Company began the year without an investment portfolio. During the year

Question

Yankton Company began the year without an investment portfolio. During the year they purchased investments classified as availablefor-
sale securities at a cost of $13,000. At the end of the year, the market value of the securities was $11,000. The Yankton Company's
financial statements for the current year should show
a. a loss of $2,000 on the income statement and temporary investments of $11,000 on the balance sheet
b. a loss of $2,000 on the income statement and available-for-sale securities of $13,000 on the balance sheet
c. no loss on the income statement, available-for-sale securities of $11,000 and an unrealized loss of $2,000 as a stockholders'
equity adjustment on the balance sheet
d. no loss on the income statement and available-for-sale securities of $13,000 on the balance sheet

Explanation / Answer

c. no loss on the income statement, available-for-sale securities of $11,000 and an unrealized loss of $2,000 as a stockholders' equity adjustment on the balance sheet is the answer for sure as the end market values was $11,000.

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