Respond to the following prompts.

1) Cite the ASC down to the Paragraph. For example, (ASC 330-10-05-01)2) Copy-paste the paragraph you cite from the codification into the word document. This is what I demonstrated in class.

2) Copy-paste the paragraph you cite from the codification into the word document. This is what I demonstrated in class.

3) Interpret the codification paragraph into plain English as best you can. In other words, how would you explain the appropriate accounting treatment to a colleague, boss, or business partner who has a basic understanding of accounting? You may (and are encouraged to) use debits and credits or t-accounts to illustrate the accounting if appropriate.

Question 1 (70 points): After working for an accounting firm for a number of years you decide to go work for a hedge fund as Assistant Controller. The hedge fund invests in a variety of marketable securities, including equity of other companies (typically the firms common stock) and other companies publicly traded debt. The company also invests in derivative securities, in particular options, and sometimes engages in what is called short selling, wherein it borrows shares of stock from another company and sells it with the promise to return the shares of stock in the future with an additional fee or interest. The hedge fund has a large short interest in a particular company, GameStop, and the price changed rapidly shortly after you arrived. How should the company account for this investment? If the company had outstanding options it has written or purchased, how should it account for these investments? Provide short summaries of each of these investments (citing appropriately) and determine the correct accounting when the prices change rapidly, citing ASC where appropriate.