Beresford Inc. purchased several investments in debt securities during 2017, its first year of operations. The following information pertains to these securities. The fluctuations in their fair values are not considered permanent.
| Held to Maturity Securities: |
Fair Value 12/31/2017 |
Fair Value 12/31/2018 |
Amortized Cost 12/31/2017 |
Amortized Cost 12/31/2018 |
||||||||
| ABC Co. Bonds | $ | 375,000 | $ | 400,000 | $ | 367,500 | $ | 360,000 | ||||
| Trading Securities: | Fair Value 12/31/2017 |
Fair Value 12/31/2018 |
Cost |
|||||||||
| DEF Co. Bonds | $ | 48,000 | $ | 59,500 | $ | 66,000 | ||||||
| GEH Inc. Bonds | $ | 47,000 | $ | 77,000 | $ | 39,000 | ||||||
| IJK Inc. Bonds | $ | 44,000 | $ | 38,500 | $ | 32,900 | ||||||
| Available for Sale Securities: |
Fair Value 12/31/2017 |
Fair Value 12/31/2018 |
Cost |
|||||||||
| LMN Co. Bonds | $ | 130,500 | $ | 150,400 | $ | 140,000 | ||||||
What total unrealized holding gain would Beresford report in its 2018 income statement relative to its investments in debt securities?
$48,200.
$80,900.
$36,000.
$55,900.
| Answer: | |
|
Total unrealized holding gain reported
(Trading Securities ) = Total Fair value at ending (-) Total Fair value at Beginning = ( $ 59,500 + $ 77,000 + $ 38,500 ) (-) ($ 48,000 + $ 47,000 + $ 44,000 ) = $ 175,000 (-) $ 139,000 |
$ 36,000 |
| Option (C ) is Correct |
Get Answers For Free
Most questions answered within 1 hours.