Omicron Corporation invested $ 125,000 of its extra cash in securities. Under each of the following independent scenarios, (a) calculate the amount at which the investments would be valued for the year- end balance sheet, and (b) indicate how the effect of these scenarios should be reported on the other financial statements, if at all.
1. All the securities were debt securities, with a maturity date in two years. Omicron will hold the securities until they mature. The market value of the securities at year end was $ 123,000.
2. Omicron purchased the securities for trading, hoping to make a quick profit. At year end the market value of the securities was $ 120,000.
3. Omicron is uncertain about how long it will hold the securities. At year end the market value of the securities is $ 126,000.

  • CreatedSeptember 01, 2014
  • Files Included
Post your question