The investments of Harlon Enterprises included the following cost and fair value amounts:($ in millions)Fair Value, Dec. 31Securities Available-for-Sale2016Cost2017A Corporation sharesB Corporation bondsC Corporation shares$ 20$14na$ 3735351514naD Industries shares504645Totals$115$95$101Harlon Enterprises sold its holdings of A Corporation shares on June 1, 2017, for $15 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 onHarlon's 2017 pretax earnings?2. At what amount should Harlon's securities available-for-sale portfolio be reported in its 2017 balance sheet?What adjusting entry is needed to accomplish this? What is the effect of the adjustment on Harlon's 2017 pre-tax earnings?

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Answered: The investments of Harlon Enterprises…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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