The following disclosure note appeared in the July 2, 2011 quarterly financial statement of the Intel Corporation.

Note 7: Available-for-Sale Investments (partial)

Table 1: Available-for-sale investments as of July 2, 2011, and December 25, 2010, were as follows:

Table 2: The before-tax net unrealized holding gains (losses) on available-for-sale investments that have been included in accumulated other comprehensive income (loss) were as follows:

Required:
1. Looking only at Table 1, draw a T-account that shows the change between the December 25, 2010, and July 2, 2011, balances for the fair value adjustment associated with Intel’s AFS investments for the first half of 2011. By how much did the fair value change during the first half of 2011?
2. Now look at Table 2, and prepare a journal entry that recognizes for the first six months of 2011 any net unrealized holding gains and losses. Ignore income taxes.
3. Using your journal entry from requirement 2, adjust your T-account from requirement 1. Have you accounted for the entire change in the fair value adjustment that occurred during the first half of 2011? Reconsider Table 2, and speculate as to what could be causing thedifference.

July 2, 2011 December 25, 2010 Adjusted Unrealized Unrealized Fair Adjusted Unrealized Unrealized Fair in millions) Commercial paper 3,777 Government bonds Corporate bonds Bank deposits Marketable equity Value Losses Value S 5,312 (5) 10,079 (4) 2,255 1,551 Cost Cost $ _ 3,777 $ 5,312 _- 1,392 1,332 1,155 1,392 10,075 1,342 1,154 2,250 1,550 380 16 34 334 568 (10) 629 (1) 1,008 67 34 Asset-backed securities Money market fund Total avallable-for-sale 69 (10) 59 550 $ 8,609S 582 S (25) 9,166 $19,677 648 (19) $20,306 Three Months Ended Six Months Ended July 2, 2011 June 26, 2010 July 2, 2011 June 26, 2010 (In millions) Net unrealized holding gains (losses) included in other comprehensive income (loss) Net gains (losses) reclassified from accumulated other comprehensive income (loss) into earnings s (12) $ (17) 24 134 44 $7$88 74