Lyrical Company purchased equity securities for $500,000 and classified them as trading securities on September 15,2010.On December 31,2010,the current market value of the securities was $481,000.How should the investment be reported within the 2010 financial statements?
A) The investment in trading securities would be reported in the balance sheet at its $481,000 market value.
B) The investment in trading securities would be reported in the balance sheet at its $500,000 cost.
C) A realized holding loss on the trading securities would be reported on the income statement.
D) The investment in trading securities would be reported in the balance sheet at its $481,000 market value and a realized holding loss on the trading securities would be reported on the income statement.
Correct Answer:
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