At the End of the First Year of Operations, the Total

question 203

Multiple Choice

At the end of the first year of operations, the total cost of the trading securities portfolio is $179,000 and the total fair value is $174,000. What should the financial statements show?

• A) A reduction of an asset of $5,000 and a realized loss of $5,000.
• B) A reduction of an asset of $5,000 and an unrealized loss of $5,000 in the stockholders' equity section.
• C) A reduction of an asset of $5,000 in the current assets section and an unrealized loss of $5,000 under "Other expenses and losses."
• D) A reduction of an asset of $5,000 in the current assets section and a realized loss of $75,000 under "Other expenses and losses."

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Definitions:

Air Freight

The transportation of goods by aircraft, a fast but usually more expensive mode of shipping compared to road or maritime transport.

Coastal Ports

Harbors or docks located along the coastlines that serve as points for the arrival and departure of ships and goods.

Silica Sand

High-purity sand that is made predominantly of quartz silt and is used in various industries such as glass making and hydraulic fracturing.

Glass Manufacturing

The process of producing glass products, which involves melting silica sand and other raw materials to form glass, which is then shaped into desired forms.