Chapter 10, Problem 10.18AP

1.

To determine

Trading Investments:

Trading investments are the investments in debt or equity securities where the investor holds less than 20% of the voting stock. The investor wishes to sell these investments at a short notice like in a few days, week, or months to generate some profit out of it. They are treated as current assets.

To classify: Each of the investments made by Company M4Y during the year 2016.

2.

To determine

To journalize: The transactions for the investments of Company M4Yfor the year 2016.

3.

To determine

To prepare: T-accounts for the investment assets, and to show how to report the investments on M4Y’s balance sheet at December 31, 2016.