Beemer Company has provided the following information regarding its investment portfolios:
• Trading securities purchased for $150,000 during 2014 had a fair value of $165,000 as of December 31,2014 and a fair value of $154,300 as of December 31,2015.
• Available-for-sale securities purchased for $275,000 during 2014 had a fair value of $293,700 on December 31,2014 and a fair value of $301,900 on December 31,2015.
Required:
1.Determine the impact that the investment portfolios had on net income during 2015.
2.Determine the amount of the realized gain/loss to be recorded during 2016 if the trading securities were sold for $159,500.
3.Describe the difference in the financial accounting and reporting when comparing trading security portfolios to available-for-sale security portfolios.

Question

Quizplus · Accepted Answer

The Answer of Beemer Company has provided the following information regarding its investment portfolios:
• Trading securities purchased for $150,000 during 2014 had a fair value of $165,000 as of December 31,2014 and a fair value of $154,300 as of December 31,2015.
• Available-for-sale securities purchased for $275,000 during 2014 had a fair value of $293,700 on December 31,2014 and a fair value of $301,900 on December 31,2015.
Required:
1.Determine the impact that the investment portfolios had on net income during 2015.
2.Determine the amount of the realized gain/loss to be recorded during 2016 if the trading securities were sold for $159,500.
3.Describe the difference in the financial accounting and reporting when comparing trading security portfolios to available-for-sale security portfolios.

Beemer Company Has Provided the Following Information Regarding Its Investment