Ewok Enterprises Recently Elected the Fair Value Option to Account

question 27

Multiple Choice

Ewok Enterprises recently elected the fair value option to account for its investment in Yoda Inc. Ewok purchased the shares for $203,000 and the shares are currently trading for $193,000 at year-end. What is the amount of gain or loss reported at year-end for this investment and where is this gain or loss reported?

• A) Unrealized Loss of $10,000, reported as part of Net Income.
• B) Unrealized Loss of $10,000, reported as part of Other Comprehensive Income.
• C) Unrealized Gain of $10,000, reported as part of Net Income.
• D) Unrealized Gain of $10,000, reported as part of Other Comprehensive Income.

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Definitions:

Appeal To Majority

A fallacy in reasoning that argues that a proposition must be true because many or most people believe it.

Fallacy

A flaw in reasoning or a mistaken belief based on unsound argumentation.

Experts

Individuals who have extensive knowledge or proficiency in a specific field.

Appeal To Force

A logical fallacy that uses the threat of force or intimidation to convince others to accept a conclusion.