Masma Corp. began operations in 2020. An analysis of Masma's equity securities portfolio acquired in 2020 shows the following totals at the end of the year. Masma accounts for these investments using the fair value through net income (FV-NI) model. $$\begin{array} { l l }
\text { Total cast } & \$ 182,400 \
\text { Total feir market value } & 153,600
\end{array}$$ Based on this information, what amount should Masma report in its 2020 income statement for "Investment Income or Loss"?
A) $ 12,800 loss
B) $ 16,000 gain
C) $ 28,800 gain
D) $ 28,800 loss

Question

Masma Corp. began operations in 2020. An analysis of Masma's equity securities portfolio acquired in 2020 shows the following totals at the end of the year. Masma accounts for these investments using the fair value through net income (FV-NI) model. $$\begin{array} { l l } 
\text { Total cast } & \$ 182,400 \
\text { Total feir market value } & 153,600
\end{array}$$ Based on this information, what amount should Masma report in its 2020 income statement for "Investment Income or Loss"?
A) $ 12,800 loss
B) $ 16,000 gain
C) $ 28,800 gain
D) $ 28,800 loss

Quizplus · Accepted Answer

The investment income or loss is calculated as the difference between the fair market value and the total cost of the investments. Here, it's $153,600 (fair market value) - $182,400 (total cost) = -$28,800, indicating a loss of $28,800.

Masma Corp Total cast $182,400 Total feir market value 153,600\begin{array} { l l } \text { Total cast } & \$ 182,400 \\\text { Total feir market value } & 153,600\end{array} Total cast Total feir market value ​$182,400153,600​

Masma Corp $\begin{array} { l l } \text { Total cast } & \$ 182,400 \\\text { Total feir market value } & 153,600\end{array}$