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Anthers Inc. bought the following portfolio of trading securities near the end of 2018. Security Cost Fair value 12/31/2018 A $ 80,000 $ 84,000 B 60,000 54,000 C 22,000 22,000 What amount will be reported in the balance sheet for this portfolio at December 31, 2018, and how will it be classified? Amount Classification a. $ 162,000 Noncurrent Asset b. $ 162,000 Current Asset c. $ 160,000 Noncurrent Asset d. $ 160,000 Current Asset

Respuesta :

Answer:

The correct option is d. $ 160,000 Current Asset

Explanation:

Trading securities : The trading securities are those securities which is to be traded over the stock exchange schemes. It is come under current asset in the balance sheet. The motive behind these securities is to earn more and more by buying and selling them in a very short period of time.

It is computed on the basis of fair value concept.

Thus, the value of trading securities is equal to

= Fair value of A + Fair value of B + Fair value of C

= $84,000 + $54,000 + $22,000

= $160,000

Hence, the amount will be reported in the balance sheet for this portfolio at December 31, 2018 is $160,000 and it is classified under current asset.

Thus, the correct option is d. $ 160,000 Current Asset

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