Choice "a" is correct. $12,000.
Rule: The entire amount of an "extraordinary gain or loss" or an "unusual or infrequently occurring item,"
e.g., a gain or loss from sale of fixed assets, should be reported during the period (quarter) incurred.
Choices "b", "c", and "d" are incorrect. The full gain should be reported in the second quarter when it
occurred.

Choice "a" is correct. Unrealized loss on investments in marketable equity securities available for sale
would cause earnings to differ from comprehensive income for an enterprise in an industry not having
specialized accounting principles. Rule: FAC 5 defines "earnings" for a period to exclude certain
cumulative accounting adjustments and other non-owner changes in equity (such as changes in market
value of marketable securities available for sale) that are included in comprehensive income for a period.

Choice "a" is correct. Comparability and consistency are secondary qualities of both relevance and
reliability. SFAC 2 para. 111-122
Choice "b" is incorrect. Feedback value is a key characteristic of relevance only.
Choice "c" is incorrect. Verifiability is a key characteristic of reliability only.
Choice "d" is incorrect. Timeliness is a key characteristic of relevance only.