Problem

Company W purchases 10 percent of Company Z and Company W intends to hold the stock for at...

Company W purchases 10 percent of Company Z and Company W intends to hold the stock for at least five years. At the end of the current year, how would Company W’s investment in Company Z be reported on Company W’s December 31 (year-end) balance sheet?

a. At the December 31 fair value in the long-term assets section.

b. At original cost in the current assets section.

c. At the December 31 fair value in the current assets section.

d. At original cost in the long-term assets section.

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