A company purchases debt securities for $100,000 at the beginning of 2022. It classifies as trading securities
Fantastic news! We've Found the answer you've been seeking!
Question:
A company purchases debt securities for $100,000 at the beginning of 2022. It classifies as trading securities and $60,000 as AFS securities. It sells the securities in 2023.
Required
For each of the following scenarios, indicate the net effect on income and other comprehensive income in each year 2022 and 2023. In each case, any unrealized decline in value below cost is expected to be recovered and attributed to market factors.
a.
Trading securities | AFS securities | |
---|---|---|
Fair value, end of 2022 | $38,000 | $65,000 |
Selling price, 2023 | 43,000 | 64,000 |
Note: Use a negative sign with an answer to indicate the net effect amount decreases Income or OCI.
Income | OCI | |
---|---|---|
End of 2022 | Answer | Answer |
2023 | Answer | Answer |
b.
Trading securities | AFS securities | |
---|---|---|
Fair value, end of 2022 | $45,000 | $56,000 |
Selling price, 2023 | 42,000 | 68,000 |
Note: Use a negative sign with an answer to indicate the net effect amount decreases Income or OCI.
Income | OCI | |
---|---|---|
End of 2022 | Answer | Answer |
2023 | Answer | Answer |
Related Book For
Intermediate Accounting
ISBN: 978-0324592375
17th Edition
Authors: James D. Stice, Earl K. Stice, Fred Skousen
Posted Date: