Brian Company purchased 10% of the outstanding shares of Wilson Company as a long-term investment.At the end of the year the market value of the shares had increased. The increase in market value of Wilson Company shares will affect Brian Company by _____.
A)increasing assets and stockholders' equity
B)increasing stockholders' equity and decreasing investments
C)increasing investments and cash
D)having no effect

Question

Quizplus · Accepted Answer

The increase in market value of the shares will result in a gain in the value of the investment. This gain will be reported as an increase in assets and stockholders' equity on Brian Company's balance sheet.

Brian Company Purchased 10% of the Outstanding Shares of Wilson