What is the effect upon carrying value and earnings

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Financial Statement Effect of Equity Securities Presented below are three unrelated situations involving equity securities.

Situation 1

An equity security, whose market value is currently less than cost, is classified as available-for-sale but is to be reclassified as trading.

Situation 2

A noncurrent portfolio with an aggregate market value in excess of cost includes one particular security whose market value has declined to less than one-half of the original cost. The decline in value is considered to be other than temporary.

Situation 3

The portfolio of trading securities has a cost in excess of fair value of $13,500. The available-for-sale portfolio has a fair value in excess of cost of $28,600.What is the effect upon carrying value and earnings for each of the situations above? 

Reference no: EM131116342

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