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LTIPLE CHOICE Instructions: Circle the best answer for each of the following questions. 1. Which of the following is not a strategic purpose of a

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LTIPLE CHOICE Instructions: Circle the best answer for each of the following questions. 1. Which of the following is not a strategic purpose of a long-term investment in another company's common stock? a. expansion b. integration c. interest revenue d. reduction of costs 2. An investment in bonds with a book value of $125,700 is sold for $132,000. The gain or loss on the sale of the bond investments is: a. loss of $6,300 b. gain of $6,300 c. loss of $125,700 d. gain of $132,000 3. An investor is assumed to have a degree of control of significant influence over the investee when the investor owns what percentage of the outstanding common stock of the investee? a. less than 20% b. between 20% and 50% c, between 51% and 80% d, between 80% and 100% 4. When an investor owns between 20% and 50% of the outstanding common stock of the investee, the investor should account for its investment in the investee using the: a. cost method b. equity method c. purchase method d. investment method

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