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Question 9 (Mandatory) (2.5 points)

Stocks categorized as trading securities are purchased for $55,000 during Year 1. The company only closes its books once a year, on 12/31. On December 31^st of Year 1 the market value of the stock is $44,000.

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Which of the following is true about the account "Valuation allowance for trading securities?"

Question 9 options:

	The December 31st " Valuation allowance for trading securities" credit balance of $11,000 is subtracted from the account "Trading securities (at cost)" on the December 31st Balance Sheet.
	The December 31st " Valuation allowance for trading securities" debit balance of $11,000 is added to the account "Trading securities (at cost)" on the December 31st Balance Sheet.
	The December 31st " Valuation allowance for trading securities" credit balance of $12,000 is subtracted from the account "Trading securities (at cost)" on the December 31st Balance Sheet.
	There is no "Valuation allowance for trading securities" on the Balance Sheet because the "Valuation allowance for trading securities" belongs on the Income Statement.

Question 10 (Mandatory) (2.5 points)

Stocks categorized as trading securities are purchased for $55,000 during Year 1. The company only closes its books once a year, on 12/31. On December 31^st of Year 1 the market value of the stock is $44,000.

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On the companys 12/31 Balance Sheet, "Trading investments (at fair value)" will be reported as what value?

Question 10 options:

	$67,000
	$11,000
	$44,000
	$55,000

Question 11 (Mandatory) (2.5 points)

Stocks categorized as trading securities are purchased for $55,000 during Year 1. The company only closes its books once a year, on 12/31. On December 31^st of Year 1 the market value of the stock is $44,000.

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On the companys 12/31 Balance Sheet, which value is considered Book Value of the trading securities?

Question 11 options:

	$67,000
	$44,000
	$55,000
	$11,000

Question 12 (Mandatory) (2.5 points)

Stocks categorized as trading securities are purchased for $55,000 during Year 1. The company only closes its books once a year, on 12/31. On December 31^st of Year 1 the market value of the stock is $44,000.

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What is the Income Statement impact of these trading securities in the December 31st Year 1 Income Statement?

Question 12 options:

	The unrealized loss of $11,000 is recognized on the Income Statement, decreasing current period income by $11,000.
	There is no impact of these trading securities on the company's Year 1 December 31st Income Statement,
	The unrealized gain of $11,000 is recognized on the Income Statement, increasing current period income by $11,000.
	The unrealized loss of $44,000 is recognized on the Income Statement, reducing current period income by $44,000.

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