S&L Financial buys and sells securities which it classifies as available-for-sale. On December 27, 2013, S&L purchased Coca-Cola common shares for $730,000 and sold the shares on January 3, 2014, for $733,000. At December 31, the shares had a fair value of $728,000, and S&L has the intent and ability to hold the investment until fair value recovers.
What pretax amounts did S&L include in its 2013 and 2014 earnings as a result of this investment?
2013...... (Gain, Loss, or No gain/loss in earnings) what is the pretax amount?
2014......(Gain, Loss, or No gain/loss in earnings) What is the pretax amount?
Security refers to a type of tradable financial assets which focus on holding a monetary value. They may be classified as equities and debts and denote the position of ownership within the corporations that are publicly traded.
Answer and Explanation:
Calculating the gain, loss or no gain/loss in earnings:
Fair value on 31st December,2013 = $7,28,000
Purchase price = $...
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Learn more about this topic:
from Introduction to Business: Homework Help ResourceChapter 24 / Lesson 12