On June 30, 2009, MetroMedia, Inc., purchased 10,000 shares of Mitek stock for $
ID: 2358587 • Letter: O
Question
On June 30, 2009, MetroMedia, Inc., purchased 10,000 shares of Mitek stock for $20 per share. The following information pertains to the price per share of Mitek stock: Assume that management intends to hold the stock as securities available for sale for three years or more. Show how the stock investment and its holding gains would be reported at the end of 2010 and 2009 on the classified balance sheet and income statement. Assume that management purchased the stock as trading securities. Show how the investment and holding gains would be reported at the end of 2010 and 2009 on the classified balance sheet and income statement.Explanation / Answer
Date
Tdescription
DR
CR
06/30/2009
Trading Securities
200000
200000
12/31/2009
Trading Securities
40000
Unrealized gain on trading securities
40000
12/31/2010
70000
Unrealized gain on trading securities
70000
12/31/2011
Unrealized loss on trading securities
60000
Trading Securities
60000
2/14/2012
Cash
220000
Loss on sale of trading securities Dr.30000
Dr.30000
Trading Securities
250000
Date
Tdescription
DR
CR
06/30/2009
Trading Securities
200000
200000
12/31/2009
Trading Securities
40000
Unrealized gain on trading securities
40000
12/31/2010
70000
Unrealized gain on trading securities
70000
12/31/2011
Unrealized loss on trading securities
60000
Trading Securities
60000
2/14/2012
Cash
220000
Loss on sale of trading securities Dr.30000
Dr.30000
Trading Securities
250000
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