Harding Financial Services Company holds a large portfolio of debt and stock securities

f debt and stock securities Ethics Case BYP12-7 Harding Financial Services Company holds a large portfolio of debt and stock se as an investment. The total fair value of the portfolio at December 31, 2015, is greater cost. Some securities have increased in value and others have decreased. Ann Bales the vice president, and Kim Reeble, the controller, are in the process of classifying for the first securities in the portfolio. Bales suggests classifying the securities that have increased in value as trading securi order to increase net income for the year. She wants to classify the securities that have decreased in value as long-term available-for-sale securities, so that the decreases in value will not affect 2015 net income. Reeble disagrees. She recommends classifying the securities that have decreased in value as trading securities and those that have increased in value as long-term available-for-sale securities. Reeble argues that the company is having a good earnings year and that recognizing the losses now will help to smooth income for this year. Moreover, for future years, when the company may not be as profitable, the company will have built-in gains. Instructions (a) Will classifying the securities as Bales and Reeble suggest actually affect earnings as each says it will? (b) Is there anything unethical in what Bales and Reeble propose? Who are the stakehold affected by their proposals? (c) Assume that Bales and Reeble properly classify the portfolio. At year-end, Bales proposes to the securities that will increase 2015 net income, and Reeble proposes to sell the secu will decrease 2015 net income. Is this unethical? proposes to sell the securities that