THE ASSET DISPOSAL CASE The sporting thing" Early in the year, Sweetspot, Inc., a leading manufacturer of quality recre- ational equipment, put some idle cash to work by investing in marketable se- curities, some of which later advanced in price while others declined. The securities were recorded at cost. In November, Martina Nicklaus, president of Sweetspot, decided to dispose of all the securities. The securities were actively traded on the Big Board, with Sweetspot's holdings only a minor fraction of the normal daily volume. As of November 10, the pertinent figures were: Cost Market Appreciated securities Depreciated securities Total $40,000 40,000 $80,000 $70,000 27,000 $97,000 Because Sweetspot prepares financial statements only at year-end, no gains or losses have been recognized for any of the securities. President Nicklaus is considering five possible means for disposing of the marketable securities: 1. Sell for cash 2. Use to satisfy liabilities 3. Distribute to stockholders as a dividend 4. Use to pay executive bonuses 5. Donate to charity. She has told the controller that her decision about which course of action to take will depend in part on how much gain or loss will be recognized as a result of the disposal option she chooses. How much gain or loss should Sweetspot recognize under each of the five options for disposing of the assets? Should the amount depend on the means of disposal