Question:XYZ Company has three securities in its portfolio available for sale, as follows:

Security 1: Beatty, Cost: $78,000, 12/31/06 Market Value: $93,600, 12/31/07 Market Value:$100,100
Security 2: Cole, CoSt: $117,000, 12/31/06 Market Value: $120,900, 12/31/07 Market Value:$0
Security 3: Sells, Cost: $58,500, 12/31/06 Market Value: $53,500, 12/31/07 Market Value:$50,700

The Cole stock was sold in Year 2 for $127,400.

Given the above information, which of the following statements is true? 

A On its 12/31 Year 1 Balance Sheet, XYZ Company would report the Sells stock at its cost of $58,500. 
B On its Income Statement for the year ending 12/31 Year 1, XYZ Company would report an unrealized holding loss of $5,200. 
C On its Income Statement for the year ending 12/31 Year 2, XYZ Company would report an unrealized holding loss of $2,600. 
D None of these statements is true. 

+ Answer
C 

+ Explanation
Answer not sure

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Md. Habib Ullah

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