Moon Company owns 56 million shares of stock as a long-term investment in Center Company and Moon does not have significant influence over Center. During 2018, the fair value of those shares increased by $34 million. What effect does this increase have on Moon's 2018 adjustments in the statement of cash flows?
A) Cash flow from operating activities will be decreased.
B) Cash flow from investing activities will be increased.
C) Cash flow from financing activities will be increased.
D) No effect.

Question

Quizplus · Accepted Answer

The unrealized gain was included as an increase in net income but is not a cash flow and therefore is a reduction from net income in the operating activities section of the cash flow statement.

Moon Company Owns 56 Million Shares of Stock as a Long-Term