Exercise E-3 Effect of investment securities transactions on financial statements The following information pertains to Botter Supply Co. for Year 1: 1. Purchased $100.000 of marketable investiment securities 2. Earned $10,000 of cash investment revenue. 3. Sold for $30,000 securities that cost $25,000 4. The falr value of the remaining securities at December 31, Year 1, was $89,000, Required a. Record the four events in a statements model like the following one. Use a separate model for each classification ( held to maturity, (2) trading, and (3) available for sale. In the Cash Flow column, indicate whether the event is an operating activity (OA) Investing activity (1A), financing activity (FA), or net change in cash (NC). Use NA to indicate that an element was not affected by the event. The first event for the first classification is shown as an example. (Enter any decreases to account balances and cash outflows with a minus sign.) BOTTER SUPPLY CO. Horizontal Statements Models Balance Sheet Income Statement Investment Securities Liabilities Retained Earnings Unrealized Revenue / Gain Gain Expense Loss Not Income Cash Flow 100,000 (100,000) IA vent No Cash 1) Held-to-Maturity 1 (100.000) 2 3 4 Total (100.000) (2) Trading 1 100 000 0 0 0 (100,000) 2 3 4 0 0 0 Total 0 (3) Available for Sale 1 13 Total 0 b. What is the amount of net income under each of the three classifications? Net Income Held-to- Maturity Trading Available for Sale c. What is the change in cash from operating activities under each of the three classifications? (List any cash outflows w sign.) Operating Activities Hold to Maturity Trading Available for Sale