Appendix 10B: Investments.

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 2 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 \(\$ 167,000\).