During 2010, JAT Company purchased trading securities as a
Question and Solution
During 2010, JAT Company purchased trading securities as a short-term investment. The costs of the securities and their market values on December 31, 2012, are listed below.
JAT had no trading securities in the years before 2012. Before any adjustments related to these trading securities, JAT had net income of $900,000 in 2012. 1. What is net income (ignoring income taxes) after making any necessary trading security adjustments? 2. What would net income be if the market value of Security A were$350,000?