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

Question:

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

Harlon Enterprises sold its holdings of A Corporation shares on June 1, 2012, for $15 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 Harlon's 2012 pretax earnings?

2. At what amount should Harlon's securities available-for-sale portfolio be reported in its 2012 balance sheet? What adjusting entry is needed to accomplish this? What is the effect of the adjustment on Harlon's 2012 pretax earnings?

Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may... 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...