At the beginning of the year,Wilson Steel,Inc.purchased 10,000 shares of Barnes Metals,Inc.for $34,000 in exchange for cash and now holds 3.2% of the voting stock of Barnes Metals,Inc.The management of Wilson Steel intends to hold this stock for two years.Assuming no other transaction happened during the year,the ________ in the balance sheet will increase.

Question

Quizplus · Accepted Answer

Since Wilson Steel intends to hold the stock for two years, it should be classified as a long-term investment on the balance sheet. Therefore, the balance in the long-term assets section of the balance sheet will increase. There is no impact on cash, total assets, or current assets since no other transactions occurred during the year.

At the Beginning of the Year,Wilson Steel,Inc