1 At December 31 2016 the investments in securities availabl

1 At December 31, 2016, the investments in securities available-for-sale of Beale Developments were reported at $83 million: Securities available-for-sale Plus: Fair value adjustment $77 6 $83 During 2017, Beale sold its investment in Schwab Pharmaceuticals, which had cost $28 million, for $36 million. Those shares had a fair value at December 31, 2016, of $31 million. No other investments were sold. At December 31, 2017, the investments in securities available-for-sale included the cost and fair value amounts shown below (S in millions) Securities Available-for-Sale Daisy Theaters, Inc. shares Orpheum Entertainment bonds Cost $43 12 Fair Value $46 16 Unrealized Gain (Loss) $3 Totals $55 S62 $7 Required: 1. At what amount should Beale report its securities available-for-sale in its December 31, 2017, balance sheet? (Enter your answers in millions (i.e., 10,000,000 should be entered as 10).) Securities available-for sale million 2. What journal entry is needed to enable the investment to be reported at this amount? (If no entry is required for a transaction event, select \"No journal entry required\" in the first account field. Enter your answers in millionsi.e., 10,000,000 should be entered as 10).) No Event General Journal Debit Credit Red text indicates no response was expected in a cell or a la-based calculation is incorrect; no points deducted. 3. What is the amount of the reclassification adjustment to 2017 other comprehensive income? Show how the reclassification adjustment should be reported. (Amounts to be deducted should be indicated with a minus sign. Enter your answers in millions (i.e., 10,000,000 should be entered as 10).) OTHER COMPREHENSIVE INCOME Unrealized holding gains (losses) on investments Reclassification adjustment of prior years\' unrealized gain included in 2017 net income Net unrealized holding gains (losses) million million million

Solution

2. Journal entry for reporting of securities:

3. Adjustments in the other comprehensive income in 2017:

Reclassification adjustment of prior years\'

Unrealised gain included in 2017 net income

Adjustment due to fair value of securties held for sale

as on 31st December 2017

Securities available for sale

$62

million