  Using the Morita-type embedding, we show that any exact category with enough
projectives has a realization as a (pre)resolving subcategory of a module
category. When the exact category has enough injectives, the image of the
embedding can be described in terms of Wakamatsu tilting (=semi-dualizing)
subcategories. If moreover the exact category has higher kernels, then its
image coincides with the category naturally associated with a cotilting
subcategory up to summands. We apply these results to the representation theory
of artin algebras. In particular, we show that the ideal quotient of a module
category by a functorially finite subcategory closed under submodules is a
torsionfree class of some module category.
