Professor Cramer determines a final grade based on attendance, two papers, three major tests, and a final exam. Each of these activities has a total of 100 possible points. However, the activities carry different weights. Attendance is worth 4%, each paper is worth 5%, each test is worth 16%, and the final is worth 38%.

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?