A Gain or Loss on Sale of a Long-Term Investment

Multiple Choice

A gain or loss on sale of a long-term investment using the equity method is determined by comparing the cash received with the:

A) cost of the long-term investment
B) cost of the long-term investment adjusted for the investor's share of the investee's net income and cash dividends while the investment was held by the investor company
C) lower-of-cost-or-market value of the long-term investment
D) market value of the long-term investment