Assuming Once Again That LEO Uses the Equity Method to Account

question 46

Multiple Choice

Assuming once again that LEO uses the equity method to account for its investment in MARS, what would be the NET increase to the investment in MARS account during 2019?

• A) $16,000.
• B) $16,800.
• C) $17,550.
• D)$20,000.

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Definitions:

Assets

Resources owned by a business or individual that have economic value.

Statement of Cash Flows

A financial report that summarizes the amount of cash and cash equivalents entering and leaving a company, categorized into operating, investing, and financing activities.

Financing Activities

These are transactions and events that relate to how a company finances its operations, including issuing equity, obtaining loans, or paying dividends.

Investing Activities

Financial transactions related to the acquisition or sale of long-term assets and other investments not included in cash equivalents.