A Gain or Loss on the Sale of a Long-Term

question 139

Multiple Choice

A gain or loss on the sale of a long-term investment using the equity method is calculated by taking the difference between cash received and:

• A) cost of the long-term investment, adjusted by the investees net income, net loss and cash dividends, while the investment was held by the investor.
• B) lower-of-cost-or-market value of the long-term investment.
• C) cost of the long-term investment.
• D) market value of the long-term investment.

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