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sergey [27]
2 years ago
12

At the end of the first year of operations, the total cost of the trading securities portfolio is $245,000. Total fair value is

$250,000. The financial statements should show
A. an addition to an asset of $5,000 and a realized gain of $5,000.
B. an addition to an asset of $5,000 and an unrealized gain of $5,000 in the stockholders
Business
1 answer:
Korvikt [17]2 years ago
7 0

Answer:

B. an addition to an asset of $5,000 and an unrealized gain of $5,000 in the stockholders

Explanation:

There is a cost of $245,000 and the value that can be received today in case the trading securities are sold = $250,000

Thus, there can be gain in case if it is sold of $5,000.

Since it is not sold right now, and is current in nature because it is valued at fair price and not at historical cost, the gain is unrealized in nature.

Thus, this increase in value would increase the value of assets in the books, and that the gain shall be recorded as other income as unrealized gains from securities.

You might be interested in
Martinez Corporation commenced operations in early 2020. The corporation incurred $48,500 of costs such as fees to underwriters,
igomit [66]

Answer:

See below.

Explanation:

Since the expenses are related to the formation of the business, we first capitalize these expenses and record them in our balance sheet as,

Debit Intangible Assets (Formation) by $48,500

Credit Cash/Bank by $48,500

This records an asset for the year of operation.

We amortize or depreciate these type of capitalized costs over a defined period of time. Assuming that we write off the entire cost by the end of first year we will record amortization as,

Debit Amortization expense/Income statement by $48,500

Credit Intangible Assets (Formation) by $48,500

Hope that helps.

7 0
3 years ago
Write a persuasive essay on "Why We Should Start a Family Business?"
lesantik [10]
Honestly you should answer this one yourself it seems like a question that contains your own answer
4 0
2 years ago
When the interest rate on a bond is​ ________ the equilibrium interest​ rate, in the bond market there is excess​ ________ and t
Talja [164]

Answer:

The correct answer here is A) above, demand , fall.

Explanation:

Whenever the interest rate on bond is more or above the equilibrium's rate of interest , then this means there is excess demand for the bond in the market and since this excess demand for bond will lead to decrease in the interest rate of the bond, while if the situation was opposite ( excess supply in market ) the interest rate would have risen.

8 0
2 years ago
Cost leadership is most appropriate when a. industry rivalry is high and customers are very sensitive to prices. b. product inno
kvv77 [185]

Answer:

e. the power of buyers is low and barriers to entry are high.

Explanation:

  • The cost leadership is the establishing a competitive advantage by having the lowest cost of operations and cost leadership is often driven by the company efficiency in size and sales. And the cumulative expand has a well-defined scope and the economies have chosen strategist and consists of the simultaneous cost leaderships example as Walmart and is different from the price leadership.
5 0
3 years ago
For the following transaction, determine whether cash flows from operating activities will increase, decrease, or remain the sam
grandymaker [24]

In case collected cash from a customer is for services that will be performed in the next accounting period the cash flow from operating activities will increase.

The cash flow from operating activities will increase cash flow in the period of receipt itself as it will result in an increase in the cash balance of the organization  In case collected cash from a customer is for services that will be performed in the next accounting period.

If the balance of an asset will increase, cash float from operations will be lower. If the stability of an asset decreases, cash flow from operations will boom. If the balance of liability will increase, cash flows with the flow from operations will grow. If the balance of a liability decreases, cash flows with the flow from operations will decrease.

An accounting period, in bookkeeping, is the length with reference to which control accounts and economic statements are organized. In management accounting, the accounting length varies extensively and is decided with the aid of management. monthly accounting durations are common.

Learn more about accounting here brainly.com/question/26690519

#SPJ4

8 0
1 year ago
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