On June 30th, 2009, MetroMedia, Inc., purchased 10,000 shares of Mitek stock for
ID: 2372093 • Letter: O
Question
On June 30th, 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:
12/31/2009 - $24
12/31/2009 - $31
Requirement 1:
Assume that management intends to hold the stock as securies 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 balace sheet and income statement. (Leave no cells blank - be certain to enter "0" wherever required.)
Balance Sheet 2010 2009
Noncurrent Asset
Stock holders' Equity
Income Statement 2010 2009
Investment Income
Requirement 2:
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 balace sheet and income statement. (Leave no cells blank - be certain to enter "0" wherever required.)
Balance Sheet 2010 2009
Current Asset
Stock holders' Equity
Income Statement 2010 2009
Other Items
Explanation / Answer
06/30/2009 Trading Securities Dr.200000 Cash Cr200000
12/31/2009 Trading Securities Dr. 40000 Unrealized gain on trading securities Cr.40000
12/31/2010 Trading Securities Dr. 70000 Unrealized gain on trading securities Cr.70000
12/31/2011 Unrealized loss on trading securities Dr.60000 Trading Securities Cr. 60000
2/14/2012 Cash Dr 220000 Loss on sale of trading securities Dr.30000
Trading Securities Cr.250000
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