On June 15,2014,Bellows Corp

question 172

Multiple Choice

On June 15,2014,Bellows Corp.acquired 100 shares of Sonny,Inc.for $75 per share as a trading security.On December 17,2014,Bellows sold the stock for $115 per share.How would the company record this transaction?

• A)Debit Cash for $11,500,credit Short-Term Investments-Trading for $7,500,and credit Gain on Sale of Short-Term Investments for $4,000.
• B)Debit Cash for $11,500,credit Long-Term Investments-Trading for $7,500,and credit Gain on Sale of Long-Term Investments for $4,000.
• C)Debit Cash for $11,500,credit Short-Term Investments-Trading for $7,500,and credit Fair Value Adjustment-Trading for $4,000.
• D)Debit Cash for $11,500,credit Long-Term Investments-Trading for $7,500,and credit Fair Value Adjustment-Trading for $4,000.
• E)Debit Fair Value Adjustment-Trading for $4,000 and credit Gain on Sale of Short-Term Investments for $4,000.

---

Definitions:

Scoring Rubric

A set of criteria and standards used to systematically evaluate specific objectives or outcomes.

Give Reasons

The act of providing logical or rational explanations for actions, decisions, or beliefs.

Holistic Critical Thinking

An approach to critical thinking that considers all aspects, factors, and perspectives of an issue comprehensively.

Scoring Rubric

A set of criteria used for assessing or grading performances, products, or responses.