Amacon Corporation Has the Following Investments at December 31, 2012

question 133

Multiple Choice

Amacon Corporation has the following investments at December 31, 2012: If Amacon classifies its investment in DEF as available for sale, what amount will be reported in other comprehensive income at December 31, 2012?

• A)$3,000 loss
• B)$3,000 gain
• C)$5,000 gain
• D)$30,000

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Definitions:

Substitutes

Products or services that can be used in place of one another; when the price of one increases, the demand for the other may increase as consumers switch to the cheaper option.

Negative

A term indicating something less than zero or lacking in positivity, often used in financial contexts.

Income Elasticities

Income elasticities measure how the quantity demanded of a good changes in response to a change in consumers' income.

Normal Goods

Goods for which demand increases as consumer income rises, and decreases as consumer income falls.