Moon Company owns 56 million shares of stock of Center Company classified as available for sale.During 2016,the fair value of those shares increased by $34 million.What effect did this increase have on Moon's 2016 statement of cash flows?
A)Cash from operating activities increased.
B)Cash from investing activities increased.
C)Cash from financing activities increased.
D)No effect.

Question

Quizplus · Accepted Answer

The increase in fair value of available-for-sale securities does not affect the cash flows, as it is an unrealized gain and is recorded in other comprehensive income, not in the cash flow statement.

Moon Company Owns 56 Million Shares of Stock of Center