The following was taken from the 2014 annual report of General Motors (dollars in millions):

GM reported that it purchased $9,154 of securities in 2014 and that unrealized gains and losses were €œinsignificant€ in 2014.

REQUIRED:
a. Describe the current accounting treatment for short-term equity investments.
b. How is the company€™s net income affected by the dollar values reported in the footnote?
c. Draw a T-account for marketable securities and reconcile all 2014 changes.

Transcribed Image Text:

12/31/2014 12/31/2013 $9,222 $8,972 Total marketable securities