The Following Transactions Occurred During the Year for XYZ Corporation

question 115

Essay

The following transactions occurred during the year for XYZ Corporation:
(a. )During the year,trading securities were purchased for $250,000.
(b. )During the year,securities available for sale were purchased for $80,000.
(c. )During the year,trading securities that are carried on the balance sheet at their fair value of $125,000 were sold for $125,000 cash.
(d. )At the end of the year,the trading securities portfolio has an aggregate market value of $142,000 and an aggregate cost of $150,000.
(e. )At the end of the year the securities available for sale portfolio has an aggregate market
value of $95,000.
Required:
Indicate how each of these transactions would affect the statement of cash flows for a corporation.Assume the statement of cash flows is prepared using the indirect method.Each transaction is assumed to be independent of the other transactions.

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Definitions:

Free Riders

Individuals who benefit from resources, goods, or services without paying for them or contributing to their provision.

Public Goods Dilemma

A situation in which individuals can benefit from a public good without contributing to its cost, leading to potential under-provision or degradation of that good.

Tragedy of the Commons

A situation in a shared-resource system where individual users acting independently according to their own self-interest behave contrary to the common good, depleting or spoiling the shared resource.

Collective Behavior

Actions or behaviors displayed by a group of people who take collective action in response to an event, situation, or crisis.