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

Multiple Choice

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

A) lower-of-cost-or-market value of the long-term investment.
B) cost of the long-term investment.
C) market value of the long-term investment.
D) 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.