Asked by Frank Guzman on Apr 29, 2024
Verified
Sue Garner is the daughter of Fred Garner the founder and president of Big Sky Enterprises. She has been working in various departments during school vacations throughout high school. She burst into the accounting department excitedly one morning. She said that the stock prices of several of the firm's available-for-sale securities are up and that her father said that the company had made over $10000 because of this jump in stock prices. She asks to see how the increase is recorded. It is a very busy time in the accounting department and so her question is deferred.
Required:
Prepare a brief note to answer Sue's question.
Available-for-sale Securities
Financial assets not classified as held-to-maturity or trading securities, which can be sold in response to needs for liquidity or changes in interest rates, among other reasons.
Recorded
The act of documenting financial transactions in the accounting records.
- Understand the accounting treatment of unrealized gains on available-for-sale securities.
Verified Answer
RS
Rayka SiqueiraMay 01, 2024
Final Answer :
This communication can be informal but it should contain the key elements of the answer.
Learning Objectives
- Understand the accounting treatment of unrealized gains on available-for-sale securities.
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