Zimmer Bio-net (Zimmer Holdings, Inc.) provided the following disclosures in Note 7 of its 2014 annual report.

Question:

Zimmer Bio-net (Zimmer Holdings, Inc.) provided the following disclosures in Note 7 of its 2014 annual report. It describes the company€™s investments in short-term equity securities (dollars in millions). Unrealized Gains Cost Losses $869.3 (0.5) (0.1) 2014 0.1 $807.3 0.5 2013

Unrealized Gains Cost Losses $869.3 (0.5) (0.1) 2014 0.1 $807.3 0.5 2013

a. Under current accounting standards, compute the fair market value of Zimmer€™s equity portfolio for both 2014 and 2013.
b. What was the effect on the company€™s net income?
c. Assume that Zimmer sold its entire portfolio of securities at the end of 2014. How much income would be realized on the sale? Provide the journal entry.

Portfolio
A portfolio is a grouping of financial assets such as stocks, bonds, commodities, currencies and cash equivalents, as well as their fund counterparts, including mutual, exchange-traded and closed funds. A portfolio can also consist of non-publicly...

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