Business, 09.04.2021 03:20 sariyamcgregor66321

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 $ 40 $ 24 N/A
B Corporation shares 55 55 $ 57
C Corporation shares 25 N/A 24
D Industries shares 55 56 60
Totals $ 175 $ 135 $ 141
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 $25 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 2019 pretax earnings?
2. At what amount should Harlon's securities equity investment portfolio be reported in its 2019 balance sheet?

Answers: 3

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