Question
Libby Company purchased equity securities for $120,000 and classified them as available-for-sale securities. At the end of the year, the fair value of the securities
| Libby Company purchased equity securities for $120,000 and classified them as available-for-sale securities. At the end of the year, the fair value of the securities was $125,000. How should the investment be reported in the year-end financial statements? |
| The investment in available-for-sale securities would be reported in the balance sheet at its $120,000 cost. |
|
The investment in available-for sale securities would be reported in the balance sheet at its $125,000 market value. |
| The investment in available-for-sale securities would be reported in the balance sheet at its $125,000 market value and an unrealized holding gain would be reported in other comprehensive income. |
| An unrealized holding gain would be reported in other comprehensive income. |
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Auditing Excellence Principles And Practices In Accounting Ensuring Accuracy Transparency And Compliance In Financial Reporting
Authors: Ryan Flores
1st Edition
B0C6448LC8, 979-8395841360
