Hobson Company bought the securities listed below during 2008. These securities were classified as trading securities. In its December 31, 2008, income statement Hobson reported a net unrealized loss of $13,000 on these securities. Pertinent data at the end of December 2009 are as follows: What amount of loss on these securities should Hobson include in its income statement for the year ended December 31, 2009?

Question

Quizplus · Accepted Answer

The net unrealized loss for 2009 is calculated as the difference between the fair value at the end of 2009 and the fair value at the end of 2008. Since the net unrealized loss reported in 2008 was $13,000, and the total loss by the end of 2009 is $54,000, the loss for 2009 is $54,000 - $13,000 = $41,000.

Hobson Company Bought the Securities Listed Below During 2008