Page 51 - CFA Lecture Day 8 Slides
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Session Unit 7:
25. Understanding Balance Sheets (A/B/A/B/C)
A. Both trading securities and available-for-sale securities are reported on the balance sheet
at their fair values. At year-end, the fair value is $75,000 [$75 per share × 1,000 shares
B. A loss of $1,000 is recognized if the securities are considered trading securities ($4 dividend × $1,000 shares) – ($5
unrealized loss × 1,000 shares). Income is $4,000 if the investment in Company S is considered available-for-sale [$4
tanties
dividend × $1,000].
A. The difference between the issued shares and the outstanding shares is the treasury shares
B. Total stockholders’ equity consists of common stock of $550,000, preferred stock of
$175,000, retained earnings of $893,000, and accumulated other comprehensive income
of $46,000, for a total of $1,664,000. The $30,000 unrealized gain from the investment in
Beta is already included in accumulated other comprehensive income
