On July 1, 20X0, as a Long-Term Investment in Available-For-Sale

question 108

Multiple Choice

On July 1, 20X0, as a long-term investment in available-for-sale securities, Wildlife Supply Company purchased 6,000 shares of the preferred stock (non-voting) of Nature Company for $30 per share (18,000 shares outstanding) . The records of Nature Company reflect the following: $$\begin{array} { | l | r | } \hline 20X0 \text { net income } & \$ 60,000 \\\hline \text { Dividends declared and paid during December, 20X0 } & \$ 6,500 \\\hline \text { December 31, 20X0 market price per share } & \$ 27.00 \\\hline\end{array}$$ The amount reported on the statement of financial position by Wildlife Company for its investment at December 31, 20X0 would be which of the following?

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

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Definitions:

Behavioral Concept

A concept in finance that incorporates psychological theories into conventional economic theory to explain unusual market phenomena.

Net Income

The total profit of a company after all expenses and taxes have been deducted from revenue.

Resistance-Level

A price level at which a stock or market consistently fails to rise above, often signaling a possible sell-off.

Stock Price

The current price at which a specific stock is traded on the stock market.