Cook Company had the following investment portfolio of stocks that were purchased during year 2.Stock | Classification | Cost | Fair Value 12-31-Y2 | Company R | Available-for-sale | $30,000 | $32,000 | Company S | Trading | $42,000 | $46,000 | Company T | Available-for-sale | $15,000 | $18,000 |
Cook elects to use the fair value option for reporting the investment in Company R. Which of the following statements is true?
| A. Cook will report an unrealized gain on securities for $6,000 on the year 2 income statement. | | B. Cook may not elect the fair value method for the investment in Company R unless it also uses the fair value method for investments in Companies S and T. | | C. Cook will report an unrealized gain in other comprehensive income for $5,000 in year 2. | | D. Cook will report an unrealized gain on securities for $9,000 on the year 2 income statement. |
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