McGinn Company purchased 10% of RJ Company's common stock during 2014 for $100,000. The 10% investment in RJ had a $90,000 fair value at the end of 2014 and a $105,000 fair value at the end of 2015. Which of the following statements is correct if McGinn classified the investment as a trading security and sold it at the beginning of 2016 for $102,000?
A) The 2016 realized loss reported on the income statement is $3,000.
B) The 2016 realized gain reported on the income statement is $2,000.
C)The 2016 unrealized gain reported on the income statement is $2,000.
D)The 2016 unrealized loss reported on the income statement is $3,000.

Question

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The Answer of McGinn Company purchased 10% of RJ Company's common stock during 2014 for $100,000. The 10% investment in RJ had a $90,000 fair value at the end of 2014 and a $105,000 fair value at the end of 2015. Which of the following statements is correct if McGinn classified the investment as a trading security and sold it at the beginning of 2016 for $102,000?
A) The 2016 realized loss reported on the income statement is $3,000.
B) The 2016 realized gain reported on the income statement is $2,000.
C)The 2016 unrealized gain reported on the income statement is $2,000.
D)The 2016 unrealized loss reported on the income statement is $3,000.

McGinn Company Purchased 10% of RJ Company's Common Stock During