A Purchase of Common Stock of Blue Wave Corporation for $29,000

question 15

Multiple Choice

A purchase of common stock of Blue Wave Corporation for $29,000 was sold three months later for $30,000. The entry to record the sale would include a

• A) debit to Cash of $29,000.
• B) credit to Gain on Sale of Stock Investments of $1,000.
• C) credit to Stock Investments of $30,000.
• D) credit to Interest Revenue of $1,000.

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Definitions:

Direct Labor Costs

Expenses related to employees who directly produce a product or provide a service, such as wages for assembly line workers.

Work in Process Inventory

Inventory that includes materials and labor that are currently in the production process but not yet completed.

Materials Price Variance

The difference between the actual cost of direct materials and the standard cost, reflecting how effectively a company is purchasing materials.

Materials Quantity Variance

A financial metric used in cost accounting to measure the difference between the actual quantity of materials used in production and the expected quantity.