Question

Anthers Inc. bought the following portfolio of trading securities near the end of 2018. Security Cost Fair value 12/31/2018 A $ 80,000 $ 84,000 B 60,000 54,000 C 22,000 22,000 What amount will be reported in the balance sheet for this portfolio at December 31, 2018, and how will it be classified

Answer 1

d. $ 160,000, Current Asset.

Step-by-step explanation:

Step 1. Given information.

Security Cost Fair value 12/31/2016

A $80,000 $84,000

B 60,000 54,000

C 22,000 22,000

Step 2. Formulas needed to solve the exercise.

Fair value = security cost A + Security cost b + security cost c

Step 3. Calculation and Step 4. Solution.

Fair value on 12/31/2016 = $ 84,000 + $ 54,000 + $ 22,000 = $ 160,000.

As these are trading securities, they are reported in the balance as current or short-term assets at fair value.