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Question
A company purchased shares of stock of another company for $75,000 during 2011; the shares were classified as available-for-sale. The shares' market value was $79,000 at the end of 2011 and $81,000 at the end of 2012. Which of the following statements correctly describes the investor's accounting for the investment?
A. A realized gain of $4,000 was recorded during 2011.
B. An unrealized gain of $6,000 was recorded during 2012.
C. An unrealized gain of $2,000 was recorded during 2012.
D. A realized gain of $2,000 was recorded during 2012.
Answer
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