Question

J & J owns the following securities. Information relating tothe below available-for-sale equity

securities is presented.

SecurityCost Market Value

December 31, 2015

A$14,000,000 $35,000,000

B22,000,000 16,000,000

C10,000,000 18,000,000

D28,000,000 8,000,000

Total$74,000,000 $77,000,000

J & J is concerned about meeting the annual earningsestimate. The CFO has asked you to

recommend how income could be increased either by selling theinvestments for a profit or

reclassifying them in such a way as to affect income. Give yourrecommendation(s) and how

income would be effected (ignore tax affects).