Final answer:
Fulton will report at least $160,000 in current assets for trading securities, and may report an additional $70,000 if available-for-sale securities are intended to be sold within a year, possibly totaling $230,000.
Step-by-step explanation:
The student is asking about how Fulton Company will report its investments in the current assets section of its balance sheet. The correct answer is c. $160,000 or an amount greater than $160,000, depending on the circumstances.
- Trading securities are always classified as current assets and reported at fair value, which in this case is $160,000.
- Available-for-sale securities may be classified as either current or non-current, based on management's intent regarding the time period they will be held. If the intention is to sell them within a year, they would also be reported as current assets at fair value, adding $70,000 to the current assets total.
- Held-to-maturity securities are reported at amortized cost and are typically classified as non-current, unless they are due within one year.
Therefore, Fulton will certainly report $160,000 for trading securities, and depending on whether the available-for-sale securities are intended to be sold within a year, they might report an additional $70,000, leading to a potential total of $230,000 in current assets.