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 Topic: trading sec ( Topic Closed)
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aimtobeacpa
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Joined: 10 Dec 2009
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| Posted: 23 Oct 2010 at 12:36 | IP Logged
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can it be reported as long term asset.... it is given "yes"
but in one sum....two sec under non-current assets were given and the unrealized loss was mentioned in stockholder's equity...there was nothing mentioned that they r AFS....and while amount under current assets was considered trading sec..?
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aimtobeacpa
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| Posted: 23 Oct 2010 at 13:08 | IP Logged
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the wquestion i was talking abt is this
At December 31, 2005,
Hull Corp. had the following marketable equity securities that were
purchased during 2005, its first year of operations:
|
Cost |
Market |
Unrealized gain (loss) |
| In Current Assets: |
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|
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| Security A |
$ 90,000 |
$ 60,000 |
$(30,000) |
| Security B |
15,000 |
20,000 |
5,000 |
| Totals |
$105,000 |
$ 80,000 |
$(25,000) |
|
======== |
======== |
======== |
| In Noncurrent Assets:
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| Security Y |
$ 70,000 |
$ 80,000 |
$ 10,000 |
| Security Z |
90,000 |
45,000 |
(45,000) |
| Totals |
$160,000 |
$ 125,000 |
$(35,000) |
|
======== |
======== |
======== |
All market declines are considered temporary.
Variation allowances at December 31, 2005 should be established with a corresponding charge against
|
Income
|
Stockholders' equity
|
 | $60,000 | $0 |
| $30,000 | $45,000 |
 | $25,000 | $35,000 |
__________________
BEC-74,82(lost credit),78
FAR-67,80
AUD-75
REG-68,72,79
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FARleft
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Joined: 27 Sep 2010
Location: United States
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Posts: 60
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| Posted: 24 Oct 2010 at 01:12 | IP Logged
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Trading securities are normally reported as current and may be non
current if appropriate. (Becker F3(b))
The $25,000 in income is the net loss on the trading securities (gains or
losses on trading securities are always reporting in the income statement
in the current period)
The $35,000 loss (unrealized) in AFS are reported in Other comprehensive
income. Other comprehensive income are reported as a part of equity
(remember PUFE).
If you use the IDEA or the PUFE then it should help you to clarify.
If the decline is other than temporary the AFS gains/losses are reported in
the income statement.
If a security is reported in other comprehensive income, then it is more
likely to be classified as AFS (unrealized gains/losses)
Hope this helps
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aimtobeacpa
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| Posted: 24 Oct 2010 at 13:00 | IP Logged
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thank you....:)
__________________
BEC-74,82(lost credit),78
FAR-67,80
AUD-75
REG-68,72,79
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