Activity $57$ Question $6$: Q$6$ As a result of the financial statement information listed above, Year $1$ net income will $($increase $/$ decrease$)$ by $$\_\_\_\_\_\_\_.$ Activity $57$ Short$-$Term Investments Purpose: Analyze trends in Accounts Receivable and the Allowance for Bad Debt accounts. Assume you work in the corporate loan office of Lanford Bank. Chris Ives, owner of CI Manufacturing, Inc. has come to you seeking a loan of $\backslash (\backslash$$ $350,000\backslash )$ for new manufacturing equipment to expand his operations. He proposes to use his accounts receivable as collateral for the loan and has provided you with the following financial statements.BALANCE SHEET ACCOUNTS$-$December $31,$ Year $1$ Refer to the information presented above to answer the following questions. Assume this is the first year of operation. Q$1$ Investments classified as short term are intended to be sold or liquidated in $($one year or less $/$ more than one year$).$ Q$2$ Trading securities are reported on the balance sheet at their $($acquisition cost $/$ market value$).$ The fair market value of the trading securities reported above is $\backslash (\backslash$mathbf$\{\backslash$$ $212,000\}\backslash ).$ During this accounting period the market value of these trading securities has $($increased $//$ can't tell$)$ by $\backslash (\backslash$mathbf$\{\backslash$$ $12,000\}\backslash ).$ Because this is the first year of operation, these securities must have been originally purchased for $\backslash (\backslash$$ $\backslash$underline$\{\backslash$mathbf$\{212\},000\}\backslash ).$ Q$3$ If these securities were sold next year, $\backslash (\backslash$mathrm$\{$a$\}(\backslash$mathrm$\{$n$\})\backslash )($realized $/$ unrealized$)$ loss would be reported if the selling price was less than the $($acquisition cost $/$ market value at the end of last year $/$ current market value$).$ Q$4$ The amount of interest earned during this accounting period was $\backslash (\backslash$mathbf$\{\backslash$$ $4,000\}\backslash ).$ Of this amount, $\backslash (\backslash$mathbf$\{\backslash$$ $3,000\}\backslash )$ was collected in cash during this accounting period and $\backslash (\backslash$$ $\backslash$mathbf$\{1,000\}\backslash )$ is the amount of cash to be received in the future. Q$5$ The income statement accounts listed above would be reported on a multi$-$step income statement as $($operating $/$ non$-$operating$)$ revenues and expenses, indicating these are revenues and expenses from $($operating $/$ investing $/$ financing$).($Circle all that apply.$)$ Q$6$ As a result of the financial statement information listed above, Year $1$ net income will $($increase $/$ decrease$)$ by $\backslash$$