Libby Company Purchased Equity Securities for $100,000 and Classified Them

Multiple Choice

Libby Company purchased equity securities for $100,000 and classified them as available-for-sale securities on September 15, 2016. At December 31, 2016, the current fair value of the securities was $105,000. How should the investment be reported in the 2016 financial statements?

A) The investment in available-for-sale securities would be reported on the balance sheet at its $100,000 cost.
B) The $5,000 unrealized gain is reported within the income statement.
C) The $5,000 realized gain is reported within the income statement.
D) The investment in available-for-sale securities would be reported in the balance sheet at its $105,000 fair value and an unrealized holding gain on available-for-sale securities would be reported in the stockholders' equity section of the balance sheet.