On July 1, 2010, as a Long-Term Investment in Available-For-Sale

question 87

Multiple Choice

On July 1, 2010, as a long-term investment in available-for-sale securities, Wildlife Supp Company purchased 6,000 shares of the preferred stock (nonvoting) of Nature Company for $30 per share (18,000 shares outstanding) . The records of Nature Company reflect the following: The amount reported on the balance sheet by Wildlife Company for its investment at December 31, 2010 would be which of the following?

• A) $182,000
• B) $162,000
• C) $160,000
• D) $200,000

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Definitions:

Adjusting Entries

At the close of a fiscal period, entries recorded to assign revenue and costs to the actual period of occurrence.

Advance Rent

Prepaid rent, which is an amount paid prior to the period to which it relates, often accounted for as a current asset until the period to which the rent applies.

Utility Bill

A bill sent by a utility company (electricity, gas, water, etc.) charging the customer for their usage of the service.

Insurance Salesman

A professional who specializes in selling insurance policies to individuals and businesses, advising on coverage options and terms.