Munger.com began operations on January 1,2006. The company reports the following
ID: 2680134 • Letter: M
Question
Munger.com began operations on January 1,2006. The company reports the following information about its investments at December 31,2006.Current Assets in thousands
Cost
Market
Investment in marketable debt securities:
Able Corp. bonds (held to maturity)
$330,000
290,000
Bryan Co. bonds (available for sale)
800,000
825,000
Caltran, Inc. bonds (trading)
550,000
515,000
Investments in marketable equity securities
Available for sale
1,100,000
1,600,000
Trading
1,500,000
950,000
Show how each of these investments are reported on the Munger.Com balance sheet.
For assets that are marked to market, indicate where the unrealized value fluctuation is reported (in net income and/or in comprehensive income).
Explanation / Answer
Show how each of these investments are reported on the Munger.Com balance sheet.
Munger.com began operations on January 1,2006. The company reports the following information about its investments at December 31,2006.
The investments held to maturity would be shown under the long term investments.
The investments available for sale & trading would be shown under the current assets as they represent the being converted into cash quickly
For assets that are marked to market, indicate where the unrealized value fluctuation is reported (in net income and/or in comprehensive income).
the unrealized losses on the Able Corp (40,000) and Caltran Inc. (35,000) along with the trading in securities (550,000) would be considered as marked to market losses and reported in the comprehensive income.
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