On January 1, 2009, Short Company purchased as an available-for-sale investment,

Question

On January 1, 2009, Short Company purchased as an available-for-sale investment, 20,000 shares (15% of the outstanding voting shares) of Daniel Corporation's $ 1 par value common stock at a cost of $50 per share. During November 2009, Daniel Corporation declared and paid a cash dividend of $2 per share. At December 31, 2009, end of the accounting period, Daniel Corporation's shares were selling at $48. At December 31, 2009, the financial statements for Short Company should report the following amounts:

Explanation / Answer

long term investment = $1,000,000

unrealizes holding gain/loss = $80000

investment revenue = Zero

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