Detailed Answer
(b) Available-for-sale securities are reported at fair value
on the balance sheet. At 12/31/Y2, Stone has incurred gross
unrealized gains of $4,000 and gross unrealized losses of $26,000
on its available-for-sale securities. Therefore, at 12/31/Y2, the
net unrealized loss is $22,000 ($26,000 – $4,000). Stone would
have to increase the balance in accumulated other comprehensive
income from $1,500 to $22,000 at 12/31/Y2.