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12 March, 12:54

Anthers Inc. bought the following portfolio of trading securities near the end of 2018. Security Cost Fair value 12/31/2018 A $ 80,000 $ 84,000 B 60,000 54,000 C 22,000 22,000 What amount will be reported in the balance sheet for this portfolio at December 31, 2018, and how will it be classified

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  1. 12 March, 16:49
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    d. $ 160,000, Current Asset.

    Explanation:

    Step 1. Given information.

    Security Cost Fair value 12/31/2016

    A $80,000 $84,000

    B 60,000 54,000

    C 22,000 22,000

    Step 2. Formulas needed to solve the exercise.

    Fair value = security cost A + Security cost b + security cost c

    Step 3. Calculation and Step 4. Solution.

    Fair value on 12/31/2016 = $ 84,000 + $ 54,000 + $ 22,000 = $ 160,000.

    As these are trading securities, they are reported in the balance as current or short-term assets at fair value.
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