Trading Securities Midwest Bank invests in trading securities. At the beginning of December 2013, the bank held

Question:

Trading Securities Midwest Bank invests in trading securities. At the beginning of December 2013, the bank held no trading securities. During December of 2013, it entered into the following trading securities transactions:

Dec. 10 Purchased 500 'has of Carroll Company common stock for $76 per share.

21 Purchased 800 shares of Dynamo Company common stock for $34 per dun.

At the end of December, the Carroll Company common stock had a quoted market price of 579 per share, and the Dynamo Company common stock had a quoted market price of 533 per share.

Required:

1. Prepare journal entries to record the preceding information.

2. What is the unrealized holding gain or loss and where is it reported in the 2013 financial statements?

3. Show how the bank reports the trading securities on its December 31, 2013, balance sheet.

4. Next Level if Midwest uses IFRS, how would the accounting be different from U.S. GAAP?

Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on...