Multiple Choice
In June, Potter Corp paid $25,000 for 1,000 shares of Weasley Corp, which was classified as a long-term available-for-sale investment. At year-end, the fair value of the investment is $27,500. Potter will report
A) nothing until the investment is sold.
B) a $2,500 unrealized gain in its income statement.
C) a $2,500 realized gain in its income statement.
D) a $2,500 unrealized gain as other comprehensive income.
Correct Answer:

Verified
Correct Answer:
Verified
Q10: If one company owns more than 50%
Q19: The cost model is used when the
Q21: Mandrake Corp owns a 10% interest in
Q23: Under the equity method of accounting for
Q25: Dividends received on investments are accounted for
Q27: Which of the following statements is not
Q76: Equity securities are always classified as long-term
Q91: Greene Limited owns a 30% interest in
Q94: The cost model is used only for
Q98: Under the equity method, revenue is recognized