Lyrical Company Purchased Equity Securities for $500,000 and Classified Them

Multiple Choice

Lyrical Company purchased equity securities for $500,000 and classified them as trading securities on September 15, 20X0. On December 31, 20X0, the current market value of the securities was $481,000. How should the investment be reported within the 20X0 financial statements?

A) The investment in trading securities would be reported on the statement of financial position at its $481,000 market value.
B) The investment in trading securities would be reported in the statement of financial position at its $500,000 cost.
C) A realized holding loss on the trading securities would be reported on the statement of earnings.
D) The investment in trading securities would be reported in the balance sheet at its $481,000 market value and a realized holding loss on the trading securities would be reported on the statement of earnings.