Advanced Accounting 2e Susan Hamlen, Ronald Huefner, James Largay All Chapters, Original , Complete And Study material 873pages LEARNEXAMS

CHAPTER 1 Intercorporate Investments: An Overview MULTIPLE CHOICE Use the following information on a company’s investments in equity securities to answer questions 1- 4 below. The company’s accounting year ends December 31. Investment Date of acquisition Cost Fair value 12/31/13 Date sold Selling price Ajax Company stock 6/20/13 $40,000 $35,000 2/10/14 $32,000 Bril Corporation stock 5/1/13 20,000 N/A 11/15/13 26,000 Coy Company stock 8/2/13 16,000 16,500 1/17/14 23,000 1. Topic: Accounting for trading securities LO 1 If the above investments are categorized as trading securities, what amount is reported for gain or loss on securities, on the 2013 income statement? a. $1,500 gain b. $6,000 gain c. no gain or loss d. $4,500 loss ANS: a 2. Topic: Accounting for trading securities LO 1 If the above investments are categorized as trading securities, what amount is reported for gain or loss on securities, on the 2014 income statement? a. $1,000 loss b. $4,000 loss