The following information is taken from the annual report of Smith & Sons Inc.:

Explain why the net unrealized gain on available-for-sale securities was negative in Year 1. Explain why the account balance became positive in Year 2 but then declined in Year 3. Are the changes in this account reported on the company’s income statement? Would this account appear on Smith & Sons’ statement of cash flow?Why or why not?

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Other Comprehensive Income (in millions) Net unrealized gain (loss) on available-for-sale securities. Year 1 $(9,324) Year 2 $47,230 Year 3 $19,238