Case 8-8 At the end of the first year of operations, Key company had a current equity securities portfolio classified as available-for-sale

Case 8-8 At the end of the first year of operations, Key company had a current equity securities portfolio classified as available-for-sale securities with a cost of $500,000 and a fair value of$550,000. At the end of its second year of operations, Key had a current equity securities portfolio classified as available-for-sale securities with a cost of $525,000 and a fair value of $475,000. No securities were sold during the first year. One Security with a cost of $80,000 and a fair value of $70,000 at the end of the first year was sold for $100,000 during the second year. Required: a) How should Key company report the proceeding facts in its balance sheets and income statements for both years? Discuss the rationale of your answer.

Case 8-8 At the end of the first year of operations, Key company had a current equitysecurities portfolio classified as available-for-sale securities with a cost of $500,000and a fair value…

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