Use the following information on a company’s investments in equity securities to answer questions 1- 2 below. The company’s accounting year ends December 31. Investment Date of acquisition Cost Fair value 12/31/16 Date sold Selling price Ajax Company stock 6/20/16 $40,000 $35,000 2/10/17 $32,000 Bril Corporation stock 5/1/16 20,000 N/A 11/15/16 26,000 Coy Company stock 8/2/16 16,000 16,500 1/17/17 23,000 1. If the above investments are categorized as trading securities, what amount is reported for gain or loss on securities, on the 2016 income statement? 2. If the above investments are categorized as trading securities, what amount is reported for gain or loss on securities, on the 2017 income statement?
Use the following information on a company’s investments in equity securities to answer questions 1- 2 below.
The company’s accounting year ends December 31.
|
Investment |
Date of acquisition |
Cost |
Fair value 12/31/16 |
Date sold |
Selling price |
|
Ajax Company stock |
6/20/16 |
$40,000 |
$35,000 |
2/10/17 |
$32,000 |
|
Bril Corporation stock |
5/1/16 |
20,000 |
N/A |
11/15/16 |
26,000 |
|
Coy Company stock |
8/2/16 |
16,000 |
16,500 |
1/17/17 |
23,000 |
1. If the above investments are categorized as trading securities, what amount is reported for gain or loss on securities, on the 2016 income statement?
2. If the above investments are categorized as trading securities, what amount is reported for gain or loss on securities, on the 2017 income statement?
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