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The investments of Harlon Enterprises included the following cost and fair value amounts: ($ in millions) Fair Value, Dec. 31 Securities Available-for-Sale Cost 2016 2017

The investments of Harlon Enterprises included the following cost and fair value amounts:

($ in millions) Fair Value, Dec. 31
Securities Available-for-Sale Cost 2016 2017
A Corporation shares $ 22 $ 15 na
B Corporation bonds 37 37 $ 39
C Corporation shares 16 na 16
D Industries shares 46 47 51
Totals $ 121 $ 99 $ 106

Harlon Enterprises sold its holdings of A Corporation shares on June 1, 2017, for $16 million. On September 12, 2017, 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 2017 pretax earnings? (Enter your answer in millions, (i.e., 10,000,000 should be entered as 10).)

2-a.

At what amount should Harlon's securities available-for-sale portfolio be reported in its 2017 balance sheet? (Enter your answer in millions, (i.e., 10,000,000 should be entered as 10).)

2-b.

What adjusting entry is needed to accomplish this? Complete the table below and prepare the appropriate journal entries. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions, (i.e., 10,000,000 should be entered as 10).)image text in transcribed

($ in millions) Securities Available-for-Sale A Corporation shares B Corporation shares Cost at Fair Value at Cost at Fair Value at Dec. 31, 2016 Dec. 31, 2016 Dec. 31, 2017 Dec. 31, 2017 22 S 145 39 1e3 51 103 37 37 DCorporation shares 46 Totals 105 S 99 S S Amount Adjustment Type 2016 balance for fair value adjustment 2017 balance for fair value adjustment Change in fair value adjustment

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