Chapter 17, Problem 3CA

To determine

Carrying value: Carrying value is the amount that appears in balance sheet after deducting any accumulated depreciation, amortization or any impairment of assets.

Fair value: Fair value is a selling price which is agreed by the buyer and seller. It is also the estimate of the potential market price of good, service or asset.

Unrealized holding gains and losses: An unrealized gain is a profit recorded on paper results from the investment. It occurs when shares prices increase after investor purchases it, but an individual has to sell it, till the time it is not sold the amount of increase in share price is recorded as an unrealized gain.

An unrealized loss is a loss recorded on paper results from the investment. It occurs when shares prices decrease after investor purchases it, but an individual has to sell it, till the time it is not sold the amount of decrease in share price is recorded as an unrealized loss.

Trading securities: Debt securities which are held with the intention to sell in the short term for profit are called trading securities.

Available-for-sale securities: Any securities which are purchased and held with an intention to sell before its maturity, or selling prior to the longest time period in case if security is without its maturity.

Held to maturity securities: Securities which are purchased and held till maturity with the intention to hold the investment existed at the time of purchase.

To determine the effect upon carrying values and earnings for each of the situations presented in the question document.

Given information: All the information related to the situation is provided in the question document.