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

Question

Smith buys and sells securities, which it typically classifies as available for sale. On Dec 15, 2013, Smith purchased $500,000 of Jones shares and elected the fair value option to account for the Jones investment. As of Dec. 31, 2013, the Jones shares had a fair value of $525,000. In the 2013 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.

Explanation / Answer

B. Other comprehensive income of $25,000

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