Perdue Company Had the Following Transactions Pertaining to Stock Investments

question 25

Multiple Choice

Perdue Company had the following transactions pertaining to stock investments: - February 1, Purchased 3,000 shares of Hudson Company (10% ownership) at the market price of $17 per share.
- June 1, Received cash dividends of $6,000 on Hudson Company stock.
- October 1, Sold 3,000 shares of Hudson stock for $54,000.
The entry to record the sale of the stock would include a:

• A) debit to Long-Term Investment for $51,000.
• B) credit to Long-Term Investment for $51,000.
• C) debit to Gain on Sale of Investment $3,000.
• D) debit to Loss on Sale of Investment $3,000.

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Definitions:

Misleading Advertising

Marketing or promotion that deceives consumers about the nature or quality of a product or service.

Faulty

Products or goods that have defects or are not working as intended.

Sherman Act

A foundational antitrust law in the United States aimed at prohibiting monopolies and other practices that restrain free competition.

Price-Fixing

An illegal agreement among competitors to fix, raise, or lower the price of a product or service, rather than allowing the market to determine prices naturally.