Investments in equity securities

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Reference no: EM13140553

Presented below are unrelated cases involving investments in equity securities.

Case I. The fair value of the trading securities at the end of last year was 30% below original cost, and this was properly reflected in the accounts. At the end of the current year, the fair value has increased to 20% above cost.

Case II. The fair value of an available-for-sale security has declined to less than forty percent of the original cost. The decline in value is considered to be other than temporary.

Case III. An equity security, whose fair value is now less than cost, is classified as trading but is reclassified as available-for-sale.

Instructions

Indicate the accounting required for each case separately.

Reference no: EM13140553

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