On October 10, 2010, Marcus Inc. buys trading securities with an original cost of $100,000. On December 31, 2010, they have a market value of $80,000. On March 9, 2011, those securities are sold for $120,000. Determine the gains or losses in 2010 and 2011 associated with these trading securities that will be reported on the income statement. Indicate whether the gains or losses are realized or unrealized.

Question

Quizplus · Accepted Answer

The Answer of On October 10, 2010, Marcus Inc. buys trading securities with an original cost of $100,000. On December 31, 2010, they have a market value of $80,000. On March 9, 2011, those securities are sold for $120,000. Determine the gains or losses in 2010 and 2011 associated with these trading securities that will be reported on the income statement. Indicate whether the gains or losses are realized or unrealized.