Asked by
Justise Dedeaux
on Dec 05, 2024Verified
On July 1,2019,Surf Company purchased long-term investments in equity securities as follows: Blue Corporation common stock (par $5) 2,000 shares at $16 per share.
Black Company preferred stock (par $20) 1,500 shares at $30 per share.
The quoted market prices per share on December 31,2019 were as follows:
Blue Corporation stock,$15 per share
Black Company stock,$30 per share
Each of the long-term investments represents 10% of the total shares outstanding.The combined carrying value of the long-term investments reported in the balance sheet at December 31,2019 would be which of the following?
A) $77,000.
B) $73,500.
C) $71,500.
D) $75,000.
Long-Term Investments
Assets intended to be held for more than one year, including stocks, bonds, real estate, and other financial instruments.
Equity Securities
Financial instruments that represent ownership interests in corporations, such as stocks.
Market Prices
The current price at which an asset or service can be bought or sold in a particular marketplace.
- Comprehend the influence of fair value adjustments on the financial reports.
Verified Answer
DS
Learning Objectives
- Comprehend the influence of fair value adjustments on the financial reports.
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