Question
TYCO Inc. purchased several investments in debt securities during 2018, its first year of operations. The following information pertains to these securities. The fluctuations in
TYCO Inc. purchased several investments in debt securities during 2018, its first year of operations. The following information pertains to these securities. The fluctuations in their fair values are not considered permanent.
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Held to Maturity Securities: | Fair Value 12/31/2017 | Fair Value 12/31/2018 | Amortized Cost 12/31/2017 | Amortized Cost 12/31/2018 |
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ABC Co. Bonds | $ | 375,000 |
| $ | 400,000 |
| $ | 367,500 |
| $ | 360,000 |
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Trading Securities: | Fair Value 12/31/2017 | Fair Value 12/31/2018 |
Cost |
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DEF Co. Bonds | $ | 48,000 |
| $ | 59,500 |
| $ | 66,000 |
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GEH Inc. Bonds | $ | 47,000 |
| $ | 77,000 |
| $ | 39,000 |
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IJK Inc. Bonds | $ | 44,000 |
| $ | 38,500 |
| $ | 32,900 |
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Available for Sale Securities: | Fair Value 12/31/2017 | Fair Value 12/31/2018 |
Cost |
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LMN Co. Bonds | $ | 130,500 |
| $ | 150,400 |
| $ | 140,000 |
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What balance sheet amount would TYCO report for the total of its investments in debt securities at 12/31/2017?
A) $637,000.
B) $644,500.
C) $645,400.
D) None of these answer choices are correct.
Note: Can you show me step-by-step why the correct answer is A. $637,000? Please show your calculations and explanations on Word or Excel as handwriting can be difficult to read. I appreciate it.
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