Question: ED-4 Reporting Unrealized Losses/Gains for Available-for-Sale Securities and Trading Securities On June 30, 2012, MetroMedia, Inc., purchased 10,000 shares of Mitek stock for $20 per share. The following information pertains to the fair value of Mitek stock: Per Share 12/31/2012 $ 24 12/31/2013 31
Required: 1. Assume that management intends to hold the stock as available-for-sale securities for three years or more. Show how the stock investment and its net unrealized losses/gains would be reported at the end of 2013 and 2012 on the classified balance sheet and income statement.
2. Assume that management purchased the stock as trading securities. Show how the investment and net unrealized losses/gains would be reported at the end of 2013 and 2012 on the classified balance sheet and income statement.