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At year-end, Rim Co. held several investments with the intent of selling them in the near term. The investments consisted of $100,000, 8%, five-year bonds, purchased for $92,000, and equity securities purchased for $35,000. At year-end, the bonds were selling on the open market for $105,000 and the equity securities had a market value of $50,000. What amount should Rim report as trading securities in its year-end balance sheet?

Respuesta :

TomShelby

Answer:

155,000  short term investment

Explanation:

The trading securities will be short term investment.

In this case both are considered to be sale in the short term, so regardless of the maturity of the bonds, we will include them and disclosure in the short-term investment

Also It would recognize the unrealized gain in the price change for both, the bonds and the securities:

105,000 bonds

 50,000 equity securities

155,000 short term investment

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