Goofy Inc Bought 15,000 Shares of Crazy Co

Goofy Inc. bought 15,000 shares of Crazy Co.'s stock for $150,000 on May 5, 2008, and classified the stock as available for sale. The market value of the stock declined to $118,000 by December 31, 2008. Goofy reclassified this investment as trading securities in December of 2009 when the market value had risen to $125,000. What effect on 2009 income should be reported by Goofy for the Crazy Co. shares?

A) $0.
B) $25,000 net loss.
C) $7,000 net gain..
D) $32,000 net loss.Unrealized loss of $32,000 recorded in an allowance during 2008, but not included in the income statement.When the shares are reclassified in 2009, the $32,000 goes into the income statement.In addition, $7,000 unrealized gain for 2009 goes directly to income.