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Question
The Kerry Company began operations during 2011 and purchased shares of Molson Corporation stock during the year. The market value of the Molson stock had increased as of the end of 2011. Kerry should have classified this investment as a trading security but mistakenly classified it as an available-for-sale security. Which of the following properly describes the impact of this error?
A. The 2011 net income was not misstated.
B. Total assets as of December 31, 2011 were understated.
C. Total stockholders' equity as of December 31, 2011 was understated.
D. Total stockholders' equity as of December 31, 2011 was not misstated.
Answer
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