Austin Company has the following securities in its portfolio of trading equity s

Question

Austin Company has the following securities in its portfolio of trading equity securities on December 31, 2015: $155,000 182,000 $337,000 Fair Value $139,000 190,000 $329,000 5,000 shares of Nicky Corp., Common 10,000 shares of Max, Common All of the securities had been purchased in 2015. In 2016, Austin completed the following securities transactions: March 1 Sold 5,000 shares of Nicky Corp., Common $31 less fees of $1,500. Apr1 Bought 600 shares of Logan Stores, Common $45 plus fees of $550. The Austin Company portfolio of trading equity securities appeared as follows on December 31, 2016:

Explanation / Answer

a) Unrealized gain/loss on trading securities 8000 Investment-Trading securities (337000-329000) 8000 b) Cash (5000*$31-$1500) 153500 Gain on sale of trading securities 14500 Investment-Trading securities 139000 c) Investment-Trading securities (600*$45+$550) 27550 Cash 27550 d) Investment-Trading securities 3450 Unrealized gain'loss on trading securities 3450 Note: Increase in fair value of shares of Max = 195500-190000 = 5500 Decrease in value of shares of Lagan =27550-25500 = 2050 Net unrealized gain 3450

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