Account for the sale of the securities from each portfolio

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Reference no: EM131865442

Victoria Company has both current and noncurrent equity securities portfolios. All of the equity securities have readily determinable fair values. Equity securities in the current portfolio are considered trading securities. At the beginning of the year, the market value of each security exceeded cost.

During the year, some of the securities increased in value. These securities (some in the current portfolio and some in the long-term portfolio) were sold. At the end of the year, the market value of each of the remaining securities was less than original cost.

Victoria also has investments in long-term bonds, which the company in- tends to hold to maturity. All of the bonds were purchased at face value. During the year, some of these bonds were called by the issuer before maturity. In each case, the call price was in excess of par value. Three months before the end of the year, additional similar bonds were purchased for face value plus two months’ accrued interest.

a. How should Victoria account for the sale of the securities from each portfolio? Why?

Reference no: EM131865442

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