6 On March 15 Alan Company purchased 10000 shares of Cameo C

6 On March 15, Alan Company purchased 10.000 shares of Cameo Corp. stock for $35,000. The investment is classified as available-for-sale securities. This is the company\'s first and only investment in available-for-sale securities. On June 30, the stock had a fair value of $34,000 Alan should do which of the following points Multiple Choice 8 02:2434 Record a debit to the Fair Value Adjustment-AFS account Record an incresse to the Unrealized Loss-Equity account Report a decreese in the Gain on Sale of Investment Iincome statement account

Solution

6)correct option is \"B\"

Record an increase in unrealised loss-equity account and credit fair value adjustment account .

7)

correct option is \"C\"

under the equity method ,share in investment equals cost of investment plus share of net income less share in dividend

8)correct option is \"A\"

They can be short term (generally all debt securities are long term in nature)