Answered: If a stock investment with…

If a stock investment with insignificant influence costs $10,000 and is sold for $12,000, how should the difference between these two amounts be recorded?

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter10: Stockholder's Equity

Section: Chapter Questions

Problem 12MCQ

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Concept explainers

Stockholder's Equity

The stockholders’ equity (often referred to as the book value of the company) is the number of assets available to the stockholder after its entire liabilities is paid off. The stockholders’ equity is also sometimes referred to as owner's equity. The stockholders’ equity or book value generally includes common stock, treasury stock retained earnings. It is an indicator of a company's financial strength and is an important item on the company's balance sheet.

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If a stock investment with insignificant influence costs
$10,000 and is sold for $12,000, how should the difference
between these two amounts be recorded?

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