Investment Securities and the Statement of Cash Flows
Indicate how each of the following transactions or events would be reflected in a statement of cash flows prepared using the indirect method. Each transaction or event is independent of the others. For items (a) and (d), assume that the balance in the market adjustment account was zero at the beginning of the year.
(a) At year end, the trading securities portfolio has an aggregate cost of $185,000 and an aggregate fair value of $150,000.
(b) During the year, trading securities and available for sale securities were purchased for $50,000 and $70,000, respectively. The securities were paid for in cash.
(c) Trading securities on hand at the beginning of the period (cost $40,000) were sold for $62,000 cash.
(d) At year end, the trading securities portfolio has an aggregate cost of $170,000 and an aggregate fair value of $190,000.