The Allowance to Adjust Investment in Available-For-Sale Securities to Market

question 158

Multiple Choice

The Allowance to Adjust Investment in Available-for-Sale Securities to Market account has a current credit balance of $1200 after the adjustment at year-end. Available-for-sale investments have a fair value of $21,000. The original cost of the investments was $22,200. The carrying value of the investments is:

• A)$23,400.
• B)$19,800.
• C)$21,000.
• D)$22,200.

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Definitions:

Significant Influence

A level of control that an investor has over a business entity, typically through ownership of a significant but not majority share of voting stock.

Consolidated Statement

A financial statement that aggregates the financial positions and results of operations of a parent company and its subsidiaries, presenting them as a single economic entity.

Net Income

The total profit of a company after all expenses, including taxes and operating costs, have been deducted from revenues.

Non-Controlling Interest

A stake in a corporation that is owned by investors who are not affiliated or connected with the parent company, representing a portion of equity ownership in a subsidiary not wholly owned by the parent.