On May 15, Tumbleweed, Inc. purchased 10,000 shares of Dansell Corp. for $80,000. The securities are considered available-for-sale securities. On September 30, the stock had a market value of $85,000. The $5,000 difference must be reported on Tumbleweed's income statement as a $5,000 gain.

Question

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The $5,000 gain is not reported on the income statement for available-for-sale securities until the securities are sold. Instead, it is reported as an unrealized gain in the shareholders' equity section of the balance sheet.