You are the new accountant for 12th National Bank and are preparing its 2019 statement of cash flows. The bank reports net income of $75,800 on its 2019 income statement. Included in this net income are the following items: $6,700 gain on sale of trading securities, $1,200 unrealized holding gain on trading securities, and $5,100 loss on sale of securities available for sale. Among its 2019 transactions, the bank sold trading securities with a carrying value of $22,900 for $29,600, and purchased trading securities for $65,200. The bank
C21-11 Researching GAAP
Situation
You are the new accountant for 12th National Bank and are preparing its 2019 statement of
Directions
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Research the applicable GAAP and prepare a written memo to the 12th National Bank’s auditors that explains how you plan to report the preceding items on the bank’s 2019 statement of cash flows. Cite your reference and applicable paragraph numbers.
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