Debt and Equity Securities
American Steel Corp. acquired the following securities in 2008:
|
|
|
|
Market Value, |
|
Security |
Classification |
Cost |
Dec 31, 2008 |
|
A |
Trading |
$10,000 |
$12,000 |
|
B |
Trading |
16,000 |
10,000 |
|
C |
Available for sale |
12,000 |
15,000 |
|
D |
Available for sale |
20,000 |
15,000 |
|
E |
Held to maturity |
20,000 |
22,000 |
At the beginning of 2008,American Steel had a zero balance in each of its market adjustment accounts.
1. What entry or entries would be made at the end of 2008, assuming the preceding market values?
2. If net income before any adjustments related to marketable securities was $100,000, what would reported income be after adjustments? (Ignore income taxes.)