Trading Securities Martin Inc. purchased the following equity securities during 2019: Security...
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Accounting
Trading Securities
Martin Inc. purchased the following equity securities during 2019:
Security
Cost
2019 Year-End Value
Tindall Corp
$266,500
$296,400
Louis Corp
$494,000
$535,600
Nichols Inc.
$689,000
$725,400
Assume these are the only securities Martin owns and that the company accounts for them as trading securities.
1. How will changes in the prices of the securities affect net income? Note: Use a negative sign to indicate a loss will be reported on the income statement or enter zero if the change in prices does not affect net income. An unrealized gain (loss) will be reported on the income statement in the amount of:
2. What would the effect on net income be if the Nichols Inc. securities were worth $601,900 at year-end? Note: Use a negative sign to indicate a loss will be reported on the income statement or enter zero if the change in prices does not affect net income. An unrealized gain (loss) will be reported on the income statement in the amount of:
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