Question

Dicker Furriers purchased 1,000 shares of Loose Corporation stock on January 10, 2012, for $800 per share and classified the investment as securities available for sale. Loose's market value was $400 per share on December 31, 2012, and the decline in value was viewed as temporary. As of December 31, 2013, Dicker still owned the Loose stock whose market value had declined to $100 per share. The decline is due to a reason that's judged to be other than temporary. Dicker's December 31, 2013, balance sheet and the 2013 income statement would show the following:

Answer 1

Dicker Furriers' balance sheet would report a decrease in the market value of the Loose stock and the income statement would show a realized loss.

Step-by-step explanation:

The subject of this question is Business.

Dicker Furriers purchased 1,000 shares of Loose Corporation stock on January 10, 2012, for $800 per share and classified the investment as securities available for sale. As of December 31, 2013, Dicker still owned the Loose stock whose market value had declined to $100 per share, and the decline was judged to be other than temporary. On Dicker's December 31, 2013, balance sheet, the investment in the Loose stock would be reported at market value of $100,000, with a decrease of $700,000 in accumulated other comprehensive income. On Dicker's 2013 income statement, the decrease in value of the Loose stock would be reported as a realized loss of $700,000.