Question

The following data pertains to Traverse Co.’s investments in marketable debt securities: Market value Cost 12/31/24 12/31/25 Trading $150,000 $155,000 $145,000 Available-for-sale 150,000 130,000 110,000 What amount should Traverse Co. report as unrealized holding loss to be included in 2025 Net Income?

Answer 1

Answer and Explanation:

The computation of the amount reports as unrealized holding loss is shown below:

The marketable securities should be reflected by considering the lower value of market value or cost therefore the trading cost would be decreased by $10,000 i.e.

= $155,000 - $145,000

= $10,000

While the available to sale value is also fall but does not reflected in the income statement it could be shown in the other comprehensive income