Nagen Company Had These Transactions Pertaining to Share Investments: Feb

question 58

Multiple Choice

Nagen Company had these transactions pertaining to share investments: Feb. 1 Purchased 2,000 shares of Horton Company (10%) for ₤34,000 cash.
June 1 Received cash dividends of ₤2 per share on Horton shares.
Oct) 1 Sold 800 Horton shares for ₤.15,600.
The entry to record the sale of the shares would include a

• A) debit to Cash for ₤13,600.
• B) credit to Gain on Sale of Share Investments for ₤3,600.
• C) debit to Share Investments for ₤13,600.
• D) credit to Gain on Sale of Share Investments for ₤2,000.

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Definitions:

GDP Deflator

An economic metric that converts output measured at current prices into constant-dollar GDP, stripping out the effects of inflation to reflect the real volume of goods and services produced.

National Income

The total amount of money earned within a country from the production of goods and services over a specific period.

Profits

The financial gain that is achieved when the amount of revenue gained from a business activity exceeds the expenses, costs, and taxes needed to sustain the activity.

Intermediate Products

Goods that are used as inputs in the production of other goods, including raw materials, unfinished goods, and semi-finished goods.