In 2011, a firm purchased a portfolio of marketable securitiesfor $2,000, which it holds as current assets. At the end of 2011,the portfolio had a market value of $1,600. During 2012, the firmsold some of the securities for $240 which had originally cost$200, but which had a market value of $180 at the end of 2011. Atthe end of 2012, the remaining securities had a market value of$2,300.
a. Assume the firm treats its holdings as available forsale.
1. Record the entry made at the end of 2011.
2. Record the entries made during 2012 and at the end of2012.
b. Assume the firm treats its holdings as tradingsecurities.
1. Record the entry made at the end of 2011.
2. Record the entries made during 2012 and at the end of2012.
