During 2011, Litten Company purchased trading securities as a short-term investment. The costs of the securities and their fair values on December 31, 2011, follow:

At the beginning of 2011, Litten had a zero balance in the market adjustment€”trading securities account. Before any adjustments related to these trading securities, Litten had net income of $300,000.
1. What is net income after making any necessary trading security adjustments? (Ignore income taxes.)
2. What would net income be if the fair value of security B were$95,000?

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Fair Value, Security Cost Dec. 31, 2011 $ 75,000 226,000 54,000 ...100,000 220,000