At the end of the first year of operations, the total cost of the trading securities portfolio is $179,000 and the total fair value is $174,000. What should the financial statements show?
A) A reduction of an asset of $5,000 and a realized loss of $5,000.
B) A reduction of an asset of $5,000 and an unrealized loss of $5,000 in the stockholders' equity section.
C) A reduction of an asset of $5,000 in the current assets section and an unrealized loss of $5,000 under "Other expenses and losses."
D) A reduction of an asset of $5,000 in the current assets section and a realized loss of $75,000 under "Other expenses and losses."

Question

Quizplus · Accepted Answer

Trading securities are reported at fair value, and unrealized losses are recognized in the income statement under "Other expenses and losses."

At the End of the First Year of Operations, the Total