Sirius Company has the following securities in its portfolio on
December 31:
Market Values, Dec. 31,
Cost
Year 2
Year...
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Accounting
Sirius Company has the following securities in its portfolio onDecember 31:
Market Values, Dec. 31,
Cost
Year 2
Year 1
5,000 shares of Minerva Corp.
$30,000
$27,500
$0
10,000 shares of Lumos Co.
40,000
43,650
44,200
Additional information:
*
Sirius is not able to exercise significant influence over eitherof the investments.
*
The Lumos Company securities were purchased at the beginning ofYear 1 and the appropriate year-end adjustments were made at theend of that year. Sirius intends to hold the Lumos stock forlong-term growth.
*
The investment in Minerva Corp. was in anticipation of a quickwash sale during February of Year 3.
*
During Year 2, Sirius received cash dividends of $450 from LumosCorp.
A.
How will each of the two securities be accounted for by SiriusCompany - Available For Sale, Trading, or Held to Maturity? Justifyyour choices.
B.
How will the change in values of Lumos and Minerva appear on theincome statement, and in what amounts?
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