Homework Answers
option b $ 37000 net unrealized holding loss
Reason ; since the investment is reclassified as trading securitities , so at the end of each subsequent accounting period the investment value should be adjusted to its fair value and any difference araising shall be recognized as operating income .
in the given case the fair value of the securities has been raised to $155000-$118000=$37000 net unrealized gain.
(the difference of 118000-203000 is already adjusted in previous year so no adjustment entry required for the same)
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