On May 15,Briar Company purchased 10,000 shares of Broder Corp.for $80,000.The securities are considered available-for-sale securities.On September 30,the stock had a market value of $85,000.The $5,000 difference must be reported on the income statement as a $5,000 gain.

Question

Quizplus · Accepted Answer

According to the accounting standards, unrealized gains or losses on available-for-sale securities are reported as accumulated other comprehensive income in the equity section of the balance sheet, not on the income statement. Therefore, the $5,000 difference in the value of the securities is reported in the equity section and not recognized in the income statement.

On May 15,Briar Company Purchased 10,000 Shares of Broder Corp