Smith buys and sells securities which it typically classifies as available for s

Question

Smith buys and sells securities which it typically classifies as available for sale. On December 15, 2011, Smith purchased $548,000 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 $592,000. In the 2011 financial statements, Smith will show (ignore taxes):
a. an investment in Jones of $548,000.
b. investment income of $44,000 on their income statement.
c. other comprehensive income of $44,000.
d. accumulated other comprehensive income of $592,000.

Explanation / Answer

c. other comprehensive income of $44,000. Available for sale securities go int the equity statement as other comprehensive income. PLEASE RATE

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