Muir,ladMeasures Its Trading Securities at Fair Value

question 2

Multiple Choice

Muir,lad.measures its trading securities at fair value.It has liabilities that it also measures using the fair value option.Muir has bonds outstanding (originally sold for $2,400,000) in the amount of $2,000,000 with a current bond premium of $340,000.The bonds were selling at 101 on the market at its year end.At what value should it report these bonds on its balance sheet at year end?

• A)$2,000,000
• B)$2,200,000
• C)$2,340,000
• D)$2,400,000

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Definitions:

Net Income

The total profit of a company after all expenses and taxes have been deducted from revenues, indicating financial performance over a period.

Company Sizes

A categorization or measurement of a business based on its scale, which can be determined by various metrics such as revenue, assets, or number of employees.

Stockholders' Equity

The residual interest in the assets of an entity that remains after deducting its liabilities; equity represents ownership interest in a company.

Earnings Per Share

This is a measure of a company's profitability, calculated by dividing the company's net income by the number of outstanding shares of its common stock.