You have just joined a CPA firm. Your manager is impressed with the recommendations that you provided on the reporting of securities for the client. He comes in and says “You did a great job! The client was thrilled with the recommendations.â€
Your manager has another consulting assignment. He asked you to prepare for him the entries and financial statement presentation for both of the following situations:
Available-for-sale securities
Cost
Fair Value
2,000 shares of ABC stock
$30,000
$35,000
1,000 shares of XYZ stock
$20,000
$18,000
Total
$50,000
$53,000
Available for trading securities
Cost
Fair Value
4,000 shares of ABC stock
$40,000
$35,000
2,000 shares of XYZ stock
$30,000
$20,000
Total
$70,000
$55,000
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