Sherwin Corporation invest its excess cash in equity securities when such founds are not needed to support operations. At the beginning of the year the company’s portfolio consisted of the following stock securities

Required
Calculate the amount of earnings reported by Sherwin Company for these investments under the following scenarios:

(a) all securities are classified as trading;

(b) all securities are classified as available-for-sale;

(c) Valentine and Shadow are classified as available-for-sale and Twin Lakes is Classified as trading.

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Security Valentine Shadow Twin Lakes Cost Basis $ 80,000 35,000 50,000 $165,000