Seybert Systems Accounts for Its Investment in Wang Engineering as Available

question 112

Multiple Choice

Seybert Systems accounts for its investment in Wang Engineering as available for sale. Seybert's balance in accumulated other comprehensive income with respect to the Wang investment is a credit balance of $20,000, and they list the investment at $100,000 on their balance sheet. Seybert purchased the Wang investment for (ignore taxes) :

• A)$100,000.
• B)$120,000.
• C)80,000.
• D)cannot be determined from this information.fair value = $100,000 less unrealized gain of $20,000 = cost of $80,000.

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Definitions:

Tariffs

Taxes imposed by a government on imported goods in order to protect domestic industries or to generate revenue.

Quotas

A quota is a government-imposed trade restriction that limits the number or monetary value of goods that can be imported or exported during a specified period.

Free Trade Agreements

Treaties between two or more countries to establish a free trade area, where commerce is conducted without tariffs or restrictions.

Personal Consumption

The value of goods and services consumed by individuals and households for their own use.