The Cost and Fair Value of the Trading Securities Held

question 64

Essay

The cost and fair value of the trading securities held by AdBrand Company as of December 31, 2012 are as follows:

Required:
(1) Complete the table above to find the total cost and fair value for the company's trading securities portfolio.
(2) Calculate and record the required December 31, 2012 adjustment.
(3) Explain how the adjustment from step (2) is reported on AdBrand's 2012 financial statements.

Apply the concept of 'getting on the balcony' for better perspective and problem-solving.

Grasp the importance of creating a holding environment to facilitate adaptive work.

Acknowledge the role of both leaders and followers in solving adaptive challenges.

Realize the significance of protecting leadership voices from below.

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Definitions:

Net Income

The total profit of a company after all expenses and taxes have been deducted from revenue.

EVA

Economic Value Added, a measure of a company's financial performance based on the residue wealth calculated by deducting its cost of capital from its operating profit.

Investor-supplied Capital

Funds provided by investors to a company, used for business activities and growth.

Operating Income

Revenue from a company’s core business operations, excluding deductions of expenses like cost of goods sold, salaries, and other operating expenses.