Question
The investments of Harlon Enterprises included the following cost and fair value amounts ($ in millions): Fair Value, Dec. 31 Equity Investments Cost 2021 2022
The investments of Harlon Enterprises included the following cost and fair value amounts ($ in millions):
| Fair Value, Dec. 31 | ||||||||||||
| Equity Investments | Cost | 2021 | 2022 | |||||||||
| A Corporation shares | $ | 60 | $ | 34 | N/A | |||||||
| B Corporation shares | 75 | 75 | $ | 77 | ||||||||
| C Corporation shares | 35 | N/A | 34 | |||||||||
| D Industries shares | 65 | 66 | 70 | |||||||||
| Totals | $ | 235 | $ | 175 | $ | 181 | ||||||
Harlon accounts for its equity investment portfolio at fair value through net income. Harlon sold its holdings of A Corporation shares on June 1, 2022, for $35 million. On September 12, it purchased the C Corporation shares. Required: 1. What is the effect of the sale of the A Corporation shares and the purchase of the C Corporation shares on Harlons 2022 pretax earnings? 2. At what amount should Harlon's securities equity investment portfolio be reported in its 2022 balance sheet?
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Fundamental Accounting Principles
Authors: John J. Wild, Ken W. Shaw, Barbara Chiappetta
20th Edition
1259157148, 78110874, 9780077616212, 978-1259157141, 77616219, 978-0078110870
