Kinsey Scales invested $ 164,000 of its extra cash in securities. Under each of the following independent
Question:
Kinsey Scales invested $ 164,000 of its extra cash in securities. Under each of the following independent scenarios, (a) calculate the amount at which the investments would be valued for the year- end balance sheet, and (b) indicate how these scenarios should be reported on the other financial statements, if at all.
1. All the securities were debt securities, with a maturity date in two years. Kinsey will hold the securities until they mature. The market value of the securities at year end was $ 158,000.
2. Kinsey purchased the securities for trading, hoping to make a quick profit. At year end the market value of the securities was $ 162,000.
3. Kinsey is uncertain about how long it will hold the securities. At year end the market value of the securities is $ 167,000.
Maturity is the date on which the life of a transaction or financial instrument ends, after which it must either be renewed, or it will cease to exist. The term is commonly used for deposits, foreign exchange spot, and forward transactions, interest...
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Financial Accounting: A Business Process Approach
ISBN: 978-0136115274
3rd edition
Authors: Jane L. Reimers