The Guitar World (TGW) holds an investment that increased in fair value over 2013, and accounts for that investment as available for sale. When considering taxes, TGW would:
A) Recognize tax expense on the income statement, and probably increase taxes payable.
B) Recognize tax expense on the income statement, and probably increase its deferred tax liability.
C) Reduce accumulated other comprehensive income (AOCI) for tax expense, and probably increase taxes payable.
D) Reduce accumulated other comprehensive income (AOCI) for tax expense, and probably increase its deferred tax liability.
Correct Answer:
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