Your client, Cascade Company, is planning to invest some of 2 answers below » Your client, Cascade...

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Your client, Cascade Company, is planning to invest some of 2 answers below » Your client, Cascade Company, is planning to invest some of its excess cash in 5-year revenue bonds issued by the county and in the shares of one of its suppliers, Teton Co. Teton’s shares trade on the over-the-counter market. Cascade plans to classify these investments as trading. They would like you to conduct some research on the accounting for these investments.

David · Accepted Answer

Running Head: ACCOUNTING RESEARCH  1
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ACCOUNTING RESEARCH  2 
Your client, Cascade Company, is planning to invest some of 2 answers below » Your client, 
Cascade Company, is planning to invest some of its excess cash in 5-year revenue bonds issued 
by the county and in the shares of one of its suppliers, Teton Co. Teton’s shares trade on the 
over-the-counter market. Cascade plans to classify these investments as trading. They would like 
you to conduct some research on the accounting for these investments.
a) Since the Teton shares do not trade on one of the large securities exchanges, Cascade 
argues that the fair value of this investment is not readily available. According to the 
authoritative literature, when is the fair value of a security “readily determinable”? 
Answer: 
Following are the three conditions that are essential for obtaining the fair value of the security. 
i. Fair value of a share is the value per unit that is determined and at that point it 
becomes the basis for the transactions. 
ii. For determining the fair value of security, it is essential to obtain the sales price 
details on the securities exchange in which they have registered with U.S.

Your client, Cascade Company, is planning to invest some of 2 answers below » Your client, Cascade Company, is planning to invest some of its excess cash in 5-year revenue bonds issued by the county...

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