On Its December 31, 2011, Balance Sheet, Merck Co

question 71

Multiple Choice

On its December 31, 2011, balance sheet, Merck Co.reported its temporary investment in equity securities, under the fair value through net income model at $330,000.At December 31, 2012, the fair value of the securities was $350,000.What should Merck report on its 2012 income statement as a result of the increase in fair value of the investments in 2012?

• A)$0
• B)Loss on investments of $10,000
• C)Unrealized gain of $20,000
• D)Investment income of $20,000

Differentiate between various statistical theorems (Tchebysheff's Theorem and the Empirical Rule) and their applicability.

Apply Tchebysheff's Theorem to estimate the bounds of data distributions.

Apply the Empirical Rule to mound-shaped distributions to determine data spread.

Calculate and interpret z-scores within a data set.

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Definitions:

Issuing Debt

The process in which a corporation or governmental entity raises funds by selling bonds, bills, or notes to investors with a promise to pay back the principal along with interest on a specified date.

Acquiring Investments

The process of allocating resources, usually money, to purchase financial assets in the hope of generating income or capital appreciation.

Net Loss

The amount by which total expenses exceed total revenues for a specific period, indicating a financial loss for the entity.

Net Increase in Cash

The amount by which cash and cash equivalents rise during a specific period, reflecting a company's liquidity position improvement.