Smith worked for Jones, Inc. Jones, Inc. fired Smith because Jones, Inc. insists that all of its employees refrain from drinking beer at any time. All Jones, Inc. employees complied with its prohibition on drinking beer, except Smith (who kept drinking). Jones, Inc. is not a just cause employer. Smith is not an employee covered by a collective bargaining agreement, nor is he a fixed term contract employee. Jones Inc.:

The following pertains to smoke, inc.’s investment in debt securities: on december 31, year 3, smoke reclassified a security acquired during the year for $70,000. it had a $50,000 fair value when it was reclassified from trading to available-for-sale. an available-for-sale security costing $75,000, written down to $30,000 in year 2 because of an other-than-temporary impairment of fair value, had a $60,000 fair value on december 31, year 3. what is the net effect of the above items on smoke’s net income for the year ended december 31, year 3?