Problem

Preparing financial statements for investment securitiesWright, Inc., began 2012 with $100...

Preparing financial statements for investment securities

Wright, Inc., began 2012 with $100,000 in both cash and common stock. The company engaged in the following investment transactions during 2012:

1. Purchased $20,000 of marketable investment securities.


2.  Earned $600 cash from investment revenue.


3. Sold investment securities for $14,000 that cost $10,000.


4.  Purchased $7,000 of additional marketable investment securities.


5. Determined that the investment securities had a fair value of $22,000 at the end of 2012.

Required

Use a vertical statements model to prepare income statements, balance sheets, and statements of cash flow for Wright, Inc., assuming the securities were (a) held to maturity, (b) trading, and (c) available for sale.

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