During 2014, National Tire Company bought 5,000 share of Ontario Tire for $22.50.They received dividends of $1.50 per share during the year.At National Tire's year-end the shares had increased in value to $24.50.What would be the effect on National Tire's net income for the year if the shares were classified as
FVTPL or as FVTOCI?
$\begin{array}{ll}&\text { FVTOCI }&\text { Amortized cost }\
A.&\$ 12,500 & \$ 12,500 \
B.&\$ 12,500 & \$ 17,500 \
C.&\$ 17,500 & \$ 12,500 \
D.&\$ 17,500 & \$ 12,500
\end{array}$

Question

During 2014, National Tire Company bought 5,000 share of Ontario Tire for $22.50.They received dividends of $1.50 per share during the year.At National Tire's year-end the shares had increased in value to $24.50.What would be the effect on National Tire's net income for the year if the shares were classified as
FVTPL or as FVTOCI? 
$\begin{array}{ll}&\text { FVTOCI }&\text { Amortized cost }\
A.&\$ 12,500 & \$ 12,500 \
B.&\$ 12,500 & \$ 17,500 \
C.&\$ 17,500 & \$ 12,500 \
D.&\$ 17,500 & \$ 12,500
\end{array}$

Quizplus · Accepted Answer

FVTOCI records the unrealized gain or loss in other comprehensive income, which does not affect net income. Amortized cost records the unrealized gain or loss in net income.

During 2014, National Tire Company Bought 5,000 Share of Ontario