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Use This Information to Answer the Following Question The Entry to Set Up the Allowance to Adjust Long-Term

question 39

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Use this information to answer the following question.These facts concern the long-term stock investments of Webster Corporation: $\begin{array}{ll}\text { June 1, } 2012 & \text { Pand cash for the followng long-term investments: } 5,000 \text { shares Wayne } \\& \text { Corporation common stock (representing } 5 \text { percent of outstanding stock) at } \\& \$ 40 \text { per share; } 3,000 \text { shares Upshur Corporation common stock (representing } \\&\text { percent of outstanding stock) at } \$ 24 \text { per share. } \\\text { Dec. } 31,2012 & \text { Quoted market prices at year end: Wayne common stock, } \$ 35 \text {; Upshur }\\& \begin{array}{l}\text { common stock, } \$ 27 .\end{array} \\\text { April 1, } 2013 & \begin{array}{l}\text { A change in policy required the sale of 1,000 shares of Wayne Corporation } \\\text { common stock at } \$ 38 .\end{array} \\\text { July 1, 2013 } & \begin{array}{l}\text { Received a cash dividend from Upshur Corporation equal to } \$ .30 \text { per share. }\end{array} \\\text { Dec. 31, 2013 } & \begin{array}{l}\text { Quoted market prices at year end: Wayne common stock, } \$ 39 \text {; Ushur } \\\text { common stock } \$ 22 .\end{array}\end{array}$
The entry to set up the Allowance to Adjust Long-Term Investments to Market in 2012 is:

Definitions:

Erikson

A reference to Erik Erikson, a developmental psychologist known for his theory on the psychosocial development of humans.

Crisis Resolution

The process of addressing an emergency or critical situation in a manner that resolves the immediate problem and restores stability.

Recency Effect

The tendency to remember the most recently presented information better than information that was presented earlier.

Perceptual Distortion

A cognitive bias that affects the way we perceive reality, often leading to misconceptions or inaccurate judgments.