Classified them available-for-sale securities

Assignment Help Financial Accounting

Reference no: EM13825335

Libby Company purchased equity securities for $120,000 and classified them as available-for-sale securities. At the end of the year, the fair value of the securities was $125,000. How should the investment be reported in the year-end financial statements?

The investment in available-for-sale securities would be reported in the balance sheet at its $120,000 cost.

The investment in available-for sale securities would be reported in the balance sheet at its $125,000 market value.

The investment in available-for-sale securities would be reported in the balance sheet at its $125,000 market value and an unrealized holding gain would be reported in other comprehensive income.

An unrealized holding gain would be reported in other comprehensive income.

Reference no: EM13825335

Questions Cloud

How you would analyze cost information within a business : Explain how you would analyze cost information within a business. Explain what methods you would use to reduce costs and enhance value within a business

Right of a state to discriminate : How does being a market participant affect the right of a state to discriminate against out-of-state businesses? Is such discrimination justified? Include proper in-text citations in APA format to support your answer.

Sports spectaculars net income under the equity method : Sports Spectacular purchased 1,200 shares of stock in The Athletic Warehouse for $40 per share. The investment is properly recorded using the equity method. By the end of the year, the stock price has increased to $42 per share. How would the change ..

Calculate the present value of the cash savings : Incognito Company is contemplating the purchase of a machine that provides it with net after-tax cash savings of $86,000 per year for 4 years. The discount rate is 6%. Calculate the present value of the cash savings.

Classified them available-for-sale securities : Libby Company purchased equity securities for $120,000 and classified them as available-for-sale securities. At the end of the year, the fair value of the securities was $125,000. How should the investment be reported in the year-end financial statem..

Edwards raises the price of grad nite tickets : When Mrs. Edwards raises the price of Grad Nite tickets, a. the demand for movie tickets increases because of the increase in the number of buyers.

Transactions affect stockholders equity : Diane's Designs has two classes of stock authorized: 7%, $10 par preferred and $1 par value common. The following transactions affect stockholders' equity during 2015, its first year of operations:

What is the entry to record the issuance of the stock : The Shoe Exchange issues 5,000 shares of its $1 par value common stock to provide funds for further expansion. The issue price is $10 per share. What is the entry to record the issuance of the stock?

Fishbone corporation sold equipment to lost company : On January 1, 2014, Fishbone Corporation sold equipment to Lost Company that cost $250,000 and that had accumulated depreciation of $100,000 on the date of sale. Record the 1/1/14 transaction for Fishbone and all necessary entries from 2014-2016. Re..

User Account

All Pages