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Unformatted text preview: , and $300 on December 31, 2012. During 2013, Dim sold all of its Witt stock at $350
per share. In its 2013 income statement, Dim would report:
A. A realized gain of $50,000.
B. A recognition of unrealized losses of $400,000.
C. A loss on the sale of investments of $450,000.
D. A trading gain of $50,000 and an unrealized loss of $500,000.
69. On January 1, 2013, Everglade Company purchased the following securities and properly accounted for
them as securities available for sale: All declines in value are considered temporary. What amount should the Everglade Company report
relative to these securities in its 2013 statement of other comprehensive income?
B. $19,000 unrealized gain.
C. $12,000 net unrealized gain.
D. $7,000 unrealized loss. 70. Boulter, Inc. began business on January 1, 2013. At the end of December 2013, Boulter had the following
investments in equity securities: All declines in value are deemed to be temporary in nature. How should the corresponding losses be
reflected in the financial statements at December 31, 2013? A.
D. Option a
Option d 71. A weakness of __________ is that firms can increase or decrease net income by choosing to sell
particular investments with net unrealized gains or unrealized losses.
A. the available-for-sale approach
B. the trading-securities approach
C. both the available-for-sale and trading-securities approaches
D. neither the available-for-sale and trading-securities approaches
72. If an available-for-sale investment is sold for which there are unrealized gains in accumulated other
comprehensive income (AOCI), a reclassification adjustment affects other comprehensive income (OCI)
in the period of sale by:
A. Reducing OCI for the amount of unrealized gains in AOCI.
B. Increasing OCI for the amount of unrealized gains in AOCI.
C. No effect on OCI, as OCI only includes the effects of unrealized gains and losses.
D. No effect on OCI, as the realized gain is included in AOCI.
73. If an available-for-sale investment is sold for which there are unrealized losses in accumulated other
comprehensive income (AOCI), the total effect on total c...
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