Question

On December 31, Ott Co. had investments in equity securities as follows:
Cost Fair value Lower of cost or fair value
Mann Co. $10,000 $8,000 $8,000
Kemo, Inc. $9,000 $11,000 $9,000
Fenn Corp. $11,000 $9,000 $9,000
$30,000 $28,000 $26,000
The Mann investment is classified as held-to-maturity, while the remaining securities are classified as available-for-sale. Ott does not elect the fair value option for reporting financial assets. Ott's December 31, Year 1, balance sheet should report total marketable debt securities as:_____.
a. $29,000.
b. $26,000.
c. $30,000.
d. $28,000.

Answer 1

Answer:

c. $30,000.

Explanation:

The calculation of the  total marketable debt securities reported in the balance sheet is given below;

= Mann Co cost + Kemo Co fair value + Fenn corp fair value

= $10,000 + $11,000 + $9,000

= $30,000

Hence, the  total marketable debt securities reported in the balance sheet is $30,000

Therefore the option c is correct