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Alpha reported the following items related to debt and equity investments for the year:

- Unrealized Gain Equity Security (Fair Value Method) $10,000

- Unrealized Gain - Available-for-Sale Debt Security 7,500

- Unrealized Gain - Trading Debt Security 2,500

- Realized Loss - Equity Security (Fair Value Method) (1,500)

1) What is the combined effect of these investments on Net Income for the year (ignore taxes)?

2) What is the combined effect of these investments on Other Comprehensive Income for the year (ignore taxes)?

3)On February 4, 2016, Investor purchased 15% of Investee common stock for $62,000. Investees net income for the years ended December 31 2016 and 2017 were $18,000 and $56,000 respectively. Investee declared no dividends during 2016; however, during 2017, the company declared a $70,000 dividend. On December 31, 2016, the fair value of investees stock that investor owned had increased to $70,000; in 2017, it increased again to $75,000. What is the carrying value of the investment on investors December 31, 2016, balance sheet?

4) Alpha reported $200,000 depreciation on its 2015 tax return; however, it reported $50,000 depreciation expense on its 2015 income statement. The difference in depreciation is a temporary difference that will reverse over time. Assuming its tax rate is constant at 30%, what amount should be added to the deferred income tax liability in its December 31, 2015, balance sheet?

5) Gamma had income before taxes of $500,000 and a tax rate of 35%. Included in this income are $60,000 in municipal bond interest and $10,000 in non-deductible fines and penalties. There are no other book-tax differences. What is its taxable income?

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