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?View Solution:
The investments of Harlon Enterprises included the following cos



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