Question
Peter Inc. purchased several investment securities during 2015, its first year of operations. The following information pertains to these securities. The fluctuations in their fair
Peter Inc. purchased several investment securities during 2015, its first year of operations. The following information pertains to these securities. The fluctuations in their fair values are not considered permanent.
Fair Value Fair Value Amortized Cost Amortized Cost
Held-to-Maturity Securities 12/31/2015 12/31/2016 12/31/2015 12/31/2016
Robin Co. Bonds $400,000 $420,000 $375,000 $370,000
Fair Value Fair Value
Available-for-Sale Securities 12/31/2015 12/31/2016 Cost
Tom Co. Stock $150,000 $160,000 $152,000
Fair Value Fair Value
Trading Securities 12/31/2015 12/31/2016 Cost
Drake Co. Stock $53,000 $63,000 $67,000
Melody Co. Stock $50,000 $77,000 $40,000
Norman Co. Stock $48,000 $45,000 $32,000
Instructions
(a) What balance sheet amount would Peter report for its total investment securities at 12/31/2015?
(b)What would be the balance in Peter's accumulated other comprehensive income with respect to these investments in its 12/31/2016 balance sheet (ignore taxes)?
(c)What total unrealized holding gain would Peter report in its 2016 income statement relative to its investment securities?
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