The investments of Harlon Enterprises included the following cost and fair value amounts ($ in millions) Fair Value, December 31 2024 2025 $ 14 35 Equity Investments A Corporation shares 8 Corporation shares C Corporation shares D Industries shares Totals Cost $ 20 35 15 45 $ 115 46 $ 95 $ 37 14 50 $ 101

Financial Accounting
14th Edition
ISBN:9781305088436
Author:Carl Warren, Jim Reeve, Jonathan Duchac
Publisher:Carl Warren, Jim Reeve, Jonathan Duchac
Chapter15: Investments And Fair Value Accounting
Section: Chapter Questions
Problem 15E
icon
Related questions
Question

5

The investments of Harlon Enterprises included the following cost and fair value amounts ($ in millions)
Equity Investments
A Corporation shares
B Corporation shares
C Corporation shares
D Industries shares
Totals
Cost
$ 20
35
15
45
$ 115
Fair Value, December 31
2024
2025
$ 14
35
46
$ 95
million
$ 37
14
50
$ 101
Harlon accounts for its equity investment portfolio at fair value through net income. Harlon sold its holdings of A Corporation shares on
June 1, 2025, for $15 million. On September 12, it purchased the C Corporation shares.
Required:
1. What is the effect of the sale of the A Corporation shares and the purchase of the C Corporation shares on Harlon's 2025 pretax
earnings?
2. At what amount should Harlon's securities equity investment portfolio be reported in its 2025 balance sheet?
Note: For all requirements, enter your answers in millions, (i.e., 10,000,000 should be entered as 10). Leave no cells blank - be
certain to enter "0" wherever required.
Transcribed Image Text:The investments of Harlon Enterprises included the following cost and fair value amounts ($ in millions) Equity Investments A Corporation shares B Corporation shares C Corporation shares D Industries shares Totals Cost $ 20 35 15 45 $ 115 Fair Value, December 31 2024 2025 $ 14 35 46 $ 95 million $ 37 14 50 $ 101 Harlon accounts for its equity investment portfolio at fair value through net income. Harlon sold its holdings of A Corporation shares on June 1, 2025, 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 2025 pretax earnings? 2. At what amount should Harlon's securities equity investment portfolio be reported in its 2025 balance sheet? Note: For all requirements, enter your answers in millions, (i.e., 10,000,000 should be entered as 10). Leave no cells blank - be certain to enter "0" wherever required.
Expert Solution
steps

Step by step

Solved in 4 steps

Blurred answer
Knowledge Booster
Accounting for Liquidation of Companies
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Recommended textbooks for you
Financial Accounting
Financial Accounting
Accounting
ISBN:
9781305088436
Author:
Carl Warren, Jim Reeve, Jonathan Duchac
Publisher:
Cengage Learning
Cornerstones of Financial Accounting
Cornerstones of Financial Accounting
Accounting
ISBN:
9781337690881
Author:
Jay Rich, Jeff Jones
Publisher:
Cengage Learning
SWFT Comprehensive Vol 2020
SWFT Comprehensive Vol 2020
Accounting
ISBN:
9780357391723
Author:
Maloney
Publisher:
Cengage
SWFT Comprehensive Volume 2019
SWFT Comprehensive Volume 2019
Accounting
ISBN:
9780357233306
Author:
Maloney
Publisher:
Cengage
SWFT Essntl Tax Individ/Bus Entities 2020
SWFT Essntl Tax Individ/Bus Entities 2020
Accounting
ISBN:
9780357391266
Author:
Nellen
Publisher:
Cengage
Individual Income Taxes
Individual Income Taxes
Accounting
ISBN:
9780357109731
Author:
Hoffman
Publisher:
CENGAGE LEARNING - CONSIGNMENT