Stocks categorized as trading securities are purchased for $55,000 during Year 1. The company only closes its books once a year, on 12/31. On December 31^st of Year 1 the market value of the stock is $67,000.

_______________________________________________________________

Please provide the adjusting entry relating to these trading securities on 12/31:

Question 1 options:

	Dr. Valuation Allowance for Trading Securities $67,000 Cr. Unrealized Gain on Trading Investments $67,000
	Dr. Unrealized Gain on Trading Securities $12,000 Cr. Valuation Allowance for Trading Investments $12,000
	Dr. Unrealized Gain on Trading Securities $67,000 Cr. Valuation Allowance for Trading Investments $67,000
	Dr. Valuation Allowance for Trading Securities $12,000 Cr. Unrealized Gain on Trading Investments $12,000

Question 2 (Mandatory) (2.5 points)

Stocks categorized as trading securities are purchased for $55,000 during Year 1. The company only closes its books once a year, on 12/31. On December 31^st of Year 1 the market value of the stock is $67,000.

_______________________________________________________________

On the company’s 12/31 Balance Sheet, "Trading investments (at cost)" will be reported as what value?

Question 2 options:

	$67,000
	$55,000
	$12,000
	$43,000

Question 3 (Mandatory) (2.5 points)

Stocks categorized as trading securities are purchased for $55,000 during Year 1. The company only closes its books once a year, on 12/31. On December 31^st of Year 1 the market value of the stock is $67,000.

_______________________________________________________________

Which of the following is true about the account "Valuation allowance for trading securities?"

Question 3 options:

	There is no "Valuation allowance for trading securities" on the Balance Sheet because the "Valuation allowance for trading securities" belongs on the Income Statement.
	The December 31st " Valuation allowance for trading securities" credit balance of $12,000 is subtracted from the account "Trading securities (at cost)" on the December 31st Balance Sheet.
	The December 31st " Valuation allowance for trading securities" debit balance of $67,000 is added to the account "Trading securities (at cost)" on the December 31st Balance Sheet.
	The December 31st " Valuation allowance for trading securities" debit balance of $12,000 is added to the account "Trading securities (at cost)" on the December 31st Balance Sheet.

Question 4 (Mandatory) (2.5 points)

Stocks categorized as trading securities are purchased for $55,000 during Year 1. The company only closes its books once a year, on 12/31. On December 31^st of Year 1 the market value of the stock is $67,000.

_______________________________________________________________

On the company’s 12/31 Balance Sheet, "Trading investments (at fair value)" will be reported as what value?

Question 4 options:

	$12,000
	$43,000
	$67,000
	$55,000

Question 5 (Mandatory) (2.5 points)

Stocks categorized as trading securities are purchased for $55,000 during Year 1. The company only closes its books once a year, on 12/31. On December 31^st of Year 1 the market value of the stock is $67,000.

_______________________________________________________________

On the company’s 12/31 Balance Sheet, which value is considered Book Value of the trading securities?

Question 5 options:

	$55,000
	$67,000
	$12,000
	$43,000

Question 6 (Mandatory) (2.5 points)

Stocks categorized as trading securities are purchased for $55,000 during Year 1. The company only closes its books once a year, on 12/31. On December 31^st of Year 1 the market value of the stock is $67,000.

_______________________________________________________________

What is the Income Statement impact of these trading securities in the December 31st Year 1 Income Statement?

Question 6 options:

	The unrealized loss of $12,000 is recognized on the Income Statement, decreasing current period income by $12,000.
	The unrealized gain of $12,000 is recognized on the Income Statement, increasing current period income by $12,000.
	The unrealized gain of $67,000 is recognized on the Income Statement, increasing current period income by $67,000.
	There is no impact of these trading securities on the company's Year 1 December 31st Income Statement,

Question 7 (Mandatory) (2.5 points)

Stocks categorized as trading securities are purchased for $55,000 during Year 1. The company only closes its books once a year, on 12/31. On December 31^st of Year 1 the market value of the stock is $44,000.

_______________________________________________________________

Please provide the adjusting entry relating to these trading securities on 12/31:

Question 7 options:

	Dr. Unrealized Loss on Trading Investments $44,000 Cr. Valuation Allowance for Trading Securities $44,000
	Dr. Unrealized Gain on Trading Securities $11,000 Cr. Valuation Allowance for Trading Investments $11,000
	Dr. Unrealized Loss on Trading Securities $12,000 Cr. Valuation Allowance for Trading Investments $12,000
	Dr. Unrealized Loss on Trading Investments $11,000 Cr. Valuation Allowance for Trading Securities $11,000

Question 8 (Mandatory) (2.5 points)

Stocks categorized as trading securities are purchased for $55,000 during Year 1. The company only closes its books once a year, on 12/31. On December 31^st of Year 1 the market value of the stock is $44,000.

_______________________________________________________________

On the company’s 12/31 Balance Sheet, "Trading investments (at cost)" will be reported as what value?

Question 8 options:

	$11,000
	$44,000
	$43,000
	$55,000

Question 9 (Mandatory) (2.5 points)

Stocks categorized as trading securities are purchased for $55,000 during Year 1. The company only closes its books once a year, on 12/31. On December 31^st of Year 1 the market value of the stock is $44,000.

_______________________________________________________________

Which of the following is true about the account "Valuation allowance for trading securities?"

Question 9 options:

	The December 31st " Valuation allowance for trading securities" credit balance of $11,000 is subtracted from the account "Trading securities (at cost)" on the December 31st Balance Sheet.
	The December 31st " Valuation allowance for trading securities" debit balance of $11,000 is added to the account "Trading securities (at cost)" on the December 31st Balance Sheet.
	The December 31st " Valuation allowance for trading securities" credit balance of $12,000 is subtracted from the account "Trading securities (at cost)" on the December 31st Balance Sheet.
	There is no "Valuation allowance for trading securities" on the Balance Sheet because the "Valuation allowance for trading securities" belongs on the Income Statement.

Question 10 (Mandatory) (2.5 points)

Stocks categorized as trading securities are purchased for $55,000 during Year 1. The company only closes its books once a year, on 12/31. On December 31^st of Year 1 the market value of the stock is $44,000.

_______________________________________________________________

On the company’s 12/31 Balance Sheet, "Trading investments (at fair value)" will be reported as what value?

Question 10 options:

	$67,000
	$11,000
	$44,000
	$55,000

Question 11 (Mandatory) (2.5 points)

Stocks categorized as trading securities are purchased for $55,000 during Year 1. The company only closes its books once a year, on 12/31. On December 31^st of Year 1 the market value of the stock is $44,000.

_______________________________________________________________

On the company’s 12/31 Balance Sheet, which value is considered Book Value of the trading securities?

Question 11 options:

	$67,000
	$44,000
	$55,000
	$11,000

Question 12 (Mandatory) (2.5 points)

Stocks categorized as trading securities are purchased for $55,000 during Year 1. The company only closes its books once a year, on 12/31. On December 31^st of Year 1 the market value of the stock is $44,000.

_______________________________________________________________

What is the Income Statement impact of these trading securities in the December 31st Year 1 Income Statement?

Question 12 options:

	The unrealized loss of $11,000 is recognized on the Income Statement, decreasing current period income by $11,000.
	There is no impact of these trading securities on the company's Year 1 December 31st Income Statement,
	The unrealized gain of $11,000 is recognized on the Income Statement, increasing current period income by $11,000.
	The unrealized loss of $44,000 is recognized on the Income Statement, reducing current period income by $44,000.

Answer rating: 100% (QA)

The detailed answer for the above question is provided below The correct responses to these questions will be as follows Question 1 The correct adjusting entry would be to debit Unrealized Gain on Tra... View the full answer