Kreiter financial services Ltd. recently purchased a portfolio of Doug and equity securities classifying the securities in the portfolio. Lemke suggest accounting for both that an equity securities expected to increase in value during the year using the fair value through profit or loss model in order to increase the income. She wants to account for all securities that are expected to decline in value using the cost model for equity securities and the amortized cost model for debt securities so that no decline in the value of the investment will ever be shown. Greenwood disagrees. She recommends accounting for all equity securities that are expected to increase in value using the equity method and using the immortalized cost model for all debt securities and the cost model for equity securities expected to fall in value to avoid recording the decline. Greenwood argues that the fair value of an equity investment is more volatile and, if the equity method where you use the instead, there would be a smoother build up in the value of investment Instructions a) Prepare arguments against the position taken by Lemke What flaws are there in her arguments? Are any of her proposals reasonable? Does she understand the implication that each method has for financial statements. b) Repair arguments against the position taken by Greenwood. What are the flaws in her argument? Are any of her proposals reasonable? Does she understand the implications that each method has for the financial statements