Reclassified investment as trading securities


Goofy Inc. bought 15,000 shares of Crazy Co.'s stock for $193,000 on May 5, 2005, and classified the stock as available for sale. The market value of the stock declined to $121,000 by December 31, 2005. Goofy reclassified this investment as trading securities in December of 2006 when the market value had risen to $162,000. What effect on 2006 income should be reported by Goofy for the Crazy Co. shares?

A) $0.

B) $31,000 net loss.

C) $41,000 net gain..

D) $72,000 net loss.

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Accounting Basics: Reclassified investment as trading securities
Reference No:- TGS060338

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