Jujol Company purchased 15000 of equity securities as an inv

Jujol Company purchased $15,000 of equity securities as an investment on June 1, 2016. That investment has year-end market value of $17,500 in 2016, $19,000 in 2017, and $18,500 in 2018. If Gremlin classifies the investment as available-for-sale securities, what would be the balance of accumulated other comprehensive income (AOCI) at the end of 2018?

Select one:

a. -$500

b. $18,500

c. $3,500

d. $15,000 e. $4,000

Solution

Solution:

Balance of AOCI at the end of 2018 = Year end Market Value in 2018 - Purchase price

= $18500 - $15000 = $3,500

Hence Option \"c\" is correct.