Webster Inc. carries the following marketable equity securities on its books at Dec 31, 2007, and 2008. All securities were purchased during 2007 and there were no beginning balances in any market adjustment accounts.

Trading Securities:

V Company cost: 50,000 market dec 31, 2007: 26,000 market dec 31, 2008: 40,000

W Company cost: 26,000 market dec 31, 2007:40,000 market dec 31, 2008: 40,000

X Company cost: 70,000 market dec 31, 2007:60,000 market dec 31, 2008: 50,000

Total cost: 146,000 market dec 31, 2007:126,000 market dec 31, 2008: 130,000

Available for Sale Securities:

Y Company cost: 420,000 market dec 31, 2007:360,000 market dec 31, 2008: 200,000

Z Company cost: 100,000 market dec31, 2007: 120,000 market dec 31, 2008: 240,000

Total cost:520,000 market dec 31, 2007: 480,000 market dec 31, 2008:440,000

The Cost method is used in accounting for all investments in securities.

1. Give the entries necessary to record the valuations for both trading and available for sale securities at Dec 31, 2007 and 2008

2. What net effect would these valuations have on 2007 and 2008 net income?