Investment as trading securities

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Reference no: EM13122153

Goofy Inc. bought 15,000 shares of Crazy Co.'s stock for $150,000 on May 5, 2010, and classified the stock as available for sale. The market value of the stock declined to $118,000 by December 31, 2010. Goofy reclassified this investment as trading securities in December of 2011 when the market value had risen to $125,000. What effect on 2011 income should be reported by Goofy for the Crazy Co. shares?

A. $7,000 net gain

B. $25,000 net loss

C. $32,000 net loss

D. $0

Reference no: EM13122153

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