Question

At December 31, 2018, Hull-Meyers Corp. had the following investments that were purchased during 2018, its first year of operations:

	Cost			Fair Value
Trading Securities:
Security A	$	905,000			$	915,500
Security B		110,000				104,900
Totals	$	1,015,000			$	1,020,400
Securities Available-for-Sale:
Security C	$	705,000			$	784,500
Security D		905,000				920,200
Totals	$	1,610,000			$	1,704,700
Securities to Be Held-to-Maturity:
Security E	$	495,000			$	505,200
Security F		620,000				614,900
Totals	$	1,115,000			$	1,120,100

No investments were sold during 2018. All securities except Security D and Security F are considered short-term investments. None of the fair value changes is considered permanent.

Reported on Balance sheet as:    Unrealized gain (loss) included in:

	current assessts	noncurrent assets	net income	other comprehensive income	Totel Comprehensive income
Trading securities
Security A	970,500
Security B	154,200
Securities Avalabile for sale
Security C	829,500
Security D
Securities to be held until maturity
Security E	545,000
Security F
Totals:	$	$	$	$	$

Answer 1

The securities are reported as follows:

1. Trading Securities, are always carried at FMV in the balance sheet and the difference betweent he FMV and Cost is unrealized gain or loss, which is reported in Income Statement and the Net Income would get affected.

2. Available for Sale securities, are current or non-current, and are always carried at FMV in the balance sheet but the unrealized gain or loss is accumulated in Other Comprehensive income until they are sold and loss or gain is realized.

3. Held for Maturity securities are always Non-current, unless they are to be matured next year. They are carried at amortized cost and no unrealized loss or gain is recognized.