Trading securities purchased in 2010 for $85,000 were valued at $80,000 on December 31, 2010. The securities were sold at the beginning of 2011 for $83,000. The 2011 income statement should report a(n):

Question

Quizplus · Accepted Answer

Since the securities were sold for $83,000 in 2011, there was a realized gain of $3,000. The unrealized loss of $5,000 in 2010 is not relevant for the 2011 income statement as it was already recognized in the previous year. Therefore, the correct answer is B.

Trading Securities Purchased in 2010 for $85,000 Were Valued at $80,000