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 shares 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

The $5,000 difference for available-for-sale securities is reported in other comprehensive income and accumulated in the equity section of the balance sheet, not on the income statement.

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