Question

At the beginning of the year, Company X purchases 2,000 shares of Company K for $35 per share. During the year, Company K paid a dividend of $2.50 per share. At the end of the year, Company K's share price was $40. What amount should Company X report on its balance sheet at year-end if the investment in Company K is considered a trading security, and what amount should be reported if the investment is considered an available-for-sale security? $80,000 would be reported for trading securities and $70,000 would be reported for available-for-sale securities Both are recorded at $70,000 Both are recorded at $80,000

          At the beginning of the year, Company X purchases 2,000 shares of Company K for $35 per share. During the year, Company K paid a dividend of $2.50 per share. At the end of the year, Company K's share price was $40.
What amount should Company X report on its balance sheet at year-end if the investment in Company K is considered a trading security, and what amount should be reported if the investment is considered an available-for-sale security?
$80,000 would be reported for trading securities and $70,000 would be reported for available-for-sale securities
Both are recorded at $70,000
Both are recorded at $80,000

At the beginning of the year, Company X purchases 2,000 shares of Company K for 35 per share. During the year, Company K paid a dividend of2.50 per share. At the end of the year, Company K's share price was 40.
What amount should Company X report on its balance sheet at year-end if the investment in Company K is considered a trading security, and what amount should be reported if the investment is considered an available-for-sale security?80,000 would be reported for trading securities and 70,000 would be reported for available-for-sale securities
Both are recorded at70,000
Both are recorded at 80,000

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