Mary Burden is the CFO of Tidewell Corporation and Tommy Brown is the Treasurer. Mary has been with the company for seven years and Tommy just started earlier this year. They meet to discuss the classification of the corporation's investment portfolio. Mary notes that Tidewell Corporation is having a good year and net income is already more than was forecasted, so she proposes investments that have increased in value since last year be classified as available-for-sale. She also proposes that any that have decreased in value be classified as trading securities. Her logic is that this will result in some amount of reported loss, but that net income will still be more than forecasted. Also, by classifying the securities that have increased in value as available fore sale, Tidewell Corporation will have some reserve gains for future periods. Tommy is not sure about Mary's proposal and thinks it would make more sense to classify the investments that have increased in value as trading, and subsequently sell them to capture the profit. He also believes that classifying the investments that have decreased in value as trading makes more sense, which will give the investments time to recover and not impact net income.

Answer the following questions:

#1Will what Mary and Tommy each suggest have the effect on net income that they suggest? Why or why not?

#2Is what Mary and Tommy each propose ethical? Why or why not?

#3If Tommy prevails and they classify the securities as he proposes for the end of the year, what would you expect Tidewell Corporation to do with the two types of investments shortly after the classification decision is made?

#4If what should happen in #3 doesn't occur, is the classification decision ethical? Why or why not?

1. Truly. In the event of interests in ready to move protections, undiscovered holding increases and misfortunes are not perceived in the salary articulation. Along these lines, any thankfulness in reasonable estimation of AFS speculations would be stopped in Fair Value Adjustment account, which is a piece of Other Comprehensive Income in Stockholders' Equity, yet not the present year Income Statement.  

Then again, interests in exchanging protections by their very nature, are held primarily to sell in the close to term. Accordingly, any expansion or diminishing in reasonable benefit of exchanging protections would be perceived in the Income Statement, and would along these lines sway the overall gain of the present time frame, and thus the stock cost.  

2. No, it isn't moral. The clients of the fiscal summaries are qualified for a genuine and reasonable portrayal of the working outcomes and the monetary situation of the organization. Interests in AFS protections are not expected to be sold in the close to term, while interests in exchanging protections are.  

What Mary and Tommy propose, through their income the board plot, will pass on a twisted view to the financial specialists and different partners by characterizing interests in exchanging protections as ready to move and interests in ready to move protections as exchanging protections. While exchanging protections are momentary ventures, AFS speculations are most certainly not.  

Additionally, both Mary and Tommy wish to guarantee that their individual rewards are flawless for the following year as well.  

3. Not long after the grouping choice, Tidewell Corporation will be made to sell the speculations named exchanging, to the disadvantage to the financial specialists in the organization. Both Mary and Tommy would need to demonstrate to the world that those speculations were in fact planned to be undercuts in the term.  

4. As effectively expressed, the arrangement choice isn't moral, despite the fact that the ventures are not sold. The clients of the budget summaries are qualified for a genuine and reasonable perspective on the benefits of the organization.  

Regardless of whether the ventures delegated exchanging are not sold during the year, the harm has just been finished. The hidden shortfall on these protections is to be accounted for on the Income Statement, and along these lines will influence overall gain for the year. Subsequently, there would be weakening in investor riches, since lower than anticipated overall gain and income per offer would antagonistically affect the Tidewell stock cost.

the correct answer option is b. a single paragraph.

explanation:

when you are thinking about paragraph​ topics, you should always choose a subject that can be adequately addressed in a single paragraph.

a paragraph is a piece of writing consisting of a few sentences that deal with a single theme. it has only a single idea that the paragraph revolves around and talks about.

so a paragraph topic must be chosen wisely where a single idea can be communicated in a single paragraph.