Question
Star Company began business in February 2015. During the year, Star purchased the three trading securities listed below. On its December 31, 2015 balance sheet,
Star Company began business in February 2015. During the year, Star purchased the three trading securities listed below. On its December 31, 2015 balance sheet, Star appropriately reported a $4,000 credit balance in its Fair Value Adjustment-Trading Securities account. There was no change during 2016 in the composition of Stars portfolio of trading securities.
| Security | Cost | Fair Value 12/31/16 |
| A | $120,000 | $126,000 |
| B | $90,000 | $80,000 |
| C | $160,000 | $157,000 |
| Total | $370,000 | $363,000 |
19. What amount of loss on these securities should be included in Star's income statement for the year ended December 31, 2016?
a. $0.
b. $3,000.
c. $7,000.
d. $11,000.
20. If the balance in the Fair Value Adjustment-Trading Securities account on December 31, 2015 was a $4,000 debit balance instead of a credit balance, what amount should Sanders credit to this account on December 31, 2016?
a. $0.
b. $3,000.
c. $7,000.
d. $11,000.
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Payroll Management 2020 Edition
Authors: Steven M. Bragg
1642210366, 978-1642210361
