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Accounting for Investments in Securities

As of December 31, 2011, Company A has the following investments in marketable securities:

Investment: Acquisition Cost ; 12/31/2011 Market Value
Trading Portfolio - Company B Common Stock: $120,000 ; $110,000
Available for Sale Portfolio - Company C Common Stock: $350,000 ; $365,000
Hold-To-Maturity Portfolio - Company D Debentures: $500,000 ; $495,000

All three investments were purchased in 2011. In 2012, Company A sold its investment in Company B for $118,000 and its investment in Company C for $359,000. As of December, 2012, the market value of the investments in Company D Debentures was $499,000. Calculate the following and indicate if gain or loss

Realized holding gain/loss recognized in the income statement in 2011

Unrealized holding gain/loss recognized in other comprehensive income in 2011

Realized holding gain/loss recognized in the income statement in 2012

Unrealized holding gain/loss recognized in other comprehensive income in 2012

Balance of accumulated other comprehensive income as of December 31, 2012

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Solution Summary

This solution illustrates how to compute the realized and unrealized gains and losses from marketable securities transactions.

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