Cane Company has two portfolios of investments in marketable equity securities. It classifies one as trading securities

Question:

Cane Company has two portfolios of investments in marketable equity securities. It classifies one as trading securities and the other as available-for-sale securities. Cane does not have the ability to exercise significant influence over any of the companies in either It sold some securities from each during the year. The company reclassified one of the securities in the available-for-sale category to the trading category when its fair value was less than cost. At the beginning and end of the year, the aggregate cost of each exceeded its aggregate market value by different amounts.

Required
1. Explain how Cane measures and reports the income statement effects of the securities sold during the year from each Explain how Cane accounts for the security which it reclassified.
3. Explain how Cane reports the effects of investments in each on its as of the end of the year and on its income statement for the year. Do not discuss the securities sold.
4. Explain gains trading. Can Cane use gains trading on either Does gains trading raise ethical issues?

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial... Portfolio
A portfolio is a grouping of financial assets such as stocks, bonds, commodities, currencies and cash equivalents, as well as their fund counterparts, including mutual, exchange-traded and closed funds. A portfolio can also consist of non-publicly...