A Debt Service Fund accumulates resources to retire debt that is due in a lump sum in the year 2014.The Fund held marketable securities that cost $900,000 when purchased during 2006 and 2007.The securities had fair market values of $875,000 on January 1,2013,and $930,000 on December 31,2013.The average fair market value during the year was $895,000.At what amount should the Fund report the securities in its balance sheet on December 31,2013?
A)$875,000
B)$895,000
C)$900,000
D)$930,000

Question

Quizplus · Accepted Answer

The securities should be reported at their fair market value at the end of the reporting period, which is December 31, 2013. The fair market value on that date was $930,000, making choice D the correct answer.

A Debt Service Fund Accumulates Resources to Retire Debt That