3. On January 1, 2018, the Ti of 100,000 shares of Twig's common stock for $540 reported net income of $100,000. Th 31, 2018. Timber mber Company acquired a 5% interest in the Twig Corporation through the purchase ,000. During 2018, Twig paid $40,000 in dividends and e market price of Twig's common stock was $5.20 per share on December should report the investment in the Twig Corporation on its December 31, 2018, balance sheet a. $520,000 b. $527,000 c. $540,000 d. $545,000 14. Which of the following statements regarding available-for-sale equity investments is true? a. The realized gain on sale is determined by comparing the carrying value of the investment with its selling price. b. Income is affected by temporary changes in market value. c. All equity security investments are classified as noncurrent d. Permanent declines in value are reported on the income statement When the market value of a company's available-for-sale investments is lower than its cost, the difference should be a. reported as a liability b. reported in the footnotes to financial statements c. deducted from the investment in available-for-sale securities account d. added to the investment in available-for-sale securities account 15. Unrealized holding gains and losses occur because a company a. 6. b. c. d. actively trades securities holds securities until maturity holds securities through the end of the reporting period records a change in fair value of the securities held even if they are not sold 17. Investmen t securities are classified based upon management's intent. This may present difficulties to readers of financial statements because a. management's judgment of intent and ability may lack comparability c. d. gain trading may result in not producing sufficient gains gain trading may result in not producing sufficient reliability than 20% of the outstanding stock of a company normally suggests the use of the