Refer to Exhibit to answer the following questions about Microsoft Corporation investments.
a. Microsoft reports unrealized gains and unrealized losses on securities. Accordingly, the investment cost basis is marked to market. What type of account is increased or decreased as a result (asset account, liability account, other gain account, other loss account, or equity account)?
b. If Microsoft investments were trading securities, what type of account would have been increased or decreased when the investment account is marked to market?
c. Given that Microsoft designates its securities portfolio as available-for-sale, what possibilities exist for the company to manage earnings using its investments?

  • CreatedJanuary 22, 2015
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