Question 5 (Mandatory) (2.5 points)

Stocks categorized as trading securities are purchased for $55,000 during Year 1. The company only closes its books once a year, on 12/31. On December 31^st of Year 1 the market value of the stock is $67,000.

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On the companys 12/31 Balance Sheet, which value is considered Book Value of the trading securities?

Question 5 options:

	$55,000
	$67,000
	$12,000
	$43,000

Question 6 (Mandatory) (2.5 points)

Stocks categorized as trading securities are purchased for $55,000 during Year 1. The company only closes its books once a year, on 12/31. On December 31^st of Year 1 the market value of the stock is $67,000.

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What is the Income Statement impact of these trading securities in the December 31st Year 1 Income Statement?

Question 6 options:

	The unrealized loss of $12,000 is recognized on the Income Statement, decreasing current period income by $12,000.
	The unrealized gain of $12,000 is recognized on the Income Statement, increasing current period income by $12,000.
	The unrealized gain of $67,000 is recognized on the Income Statement, increasing current period income by $67,000.
	There is no impact of these trading securities on the company's Year 1 December 31st Income Statement,

Question 7 (Mandatory) (2.5 points)

Stocks categorized as trading securities are purchased for $55,000 during Year 1. The company only closes its books once a year, on 12/31. On December 31^st of Year 1 the market value of the stock is $44,000.

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Please provide the adjusting entry relating to these trading securities on 12/31:

Question 7 options:

	Dr. Unrealized Loss on Trading Investments $44,000 Cr. Valuation Allowance for Trading Securities $44,000
	Dr. Unrealized Gain on Trading Securities $11,000 Cr. Valuation Allowance for Trading Investments $11,000
	Dr. Unrealized Loss on Trading Securities $12,000 Cr. Valuation Allowance for Trading Investments $12,000
	Dr. Unrealized Loss on Trading Investments $11,000 Cr. Valuation Allowance for Trading Securities $11,000

Question 8 (Mandatory) (2.5 points)

Stocks categorized as trading securities are purchased for $55,000 during Year 1. The company only closes its books once a year, on 12/31. On December 31^st of Year 1 the market value of the stock is $44,000.

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On the companys 12/31 Balance Sheet, "Trading investments (at cost)" will be reported as what value?

Question 8 options:

	$11,000
	$44,000
	$43,000
	$55,000