At the End of Its First Year, the Trading Securities

question 100

Multiple Choice

At the end of its first year, the trading securities portfolio consisted of the following common stocks. $$\begin{array} { l r r } &\text {cost}&\text {fair value}\\\text { Atrium Corporation } & \$ 46,500 & \$ 50,000 \\\text { Barnes Inc. } & 60,000 & 58,000 \\\text { Cantor Corporation } & 80,000 & 76,400 \\& \underline { \$ 186,500 } & \underline { \underline { \$ 184,400 } }\end{array}$$ In the following year, the Barnes common stock is sold for cash proceeds of $57,000. The gain or loss to be recognized on the sale is a

• A) gain of $1,200.
• B) loss of $3,000.
• C) Loss of $1,000.
• D) loss of $2,000.

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Definitions:

Eutrophication

An increase in the concentration of chemical nutrients in an ecosystem to an extent that increases the growth of algae and higher plants, often resulting in the depletion of oxygen.

Conifers

A group of cone-bearing seed plants, mostly evergreens, that include pines, spruces, and firs, known for their needle-like or scale-like leaves.

Produce Seeds

The biological process in which plants and some other organisms generate seeds to reproduce and pass genetic information to the next generation.

Moderate Climate

A climate characterized by mild temperatures, neither too hot nor too cold, often found in areas with seasonal changes.