Question

Trading securities were purchased for $100,000. Initially the investment climbed in value to $125,000. By year's end, it had decreased in value to $90,000. At what amount should the trading securities be reported on the year-end balance sheet?

$90,000

$100,000

$125,000

None of these.

Answer 1

Answer:

$90,000

Explanation:

The Trading securities are considered as cash equivalent item and recorded as current assets in the balance sheet, because of its short maturity period. The market value of securities should be reported on the balance sheet as on the year end. So, $90,000 is the appropriate answer for this question.