Hopkins Company Regularly Invests in Securities to Supplement Its Income

question 98

Multiple Choice

Hopkins Company regularly invests in securities to supplement its income.As part of their investment portfolio they bought 20,000 shares of Stern Ltd.for $12.50 per share on March 1, 2014.Hopkins designated the investment as FVTPL At their year-end, December 31, 2014; the shares were trading at $15.00.They sold the shares on January 5, 2015, for $14.50 each.What is the impact of the investment in Stern Ltd.on Hopkins Company's net income for 2014?

• A)No effect
• B)$30,000 realized gain
• C)$40,000 unrealized gain
• D)$50,000 unrealized gain

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Definitions:

Competitive Benchmarking

A process where a company compares its products or services against those of its competitors to identify areas for improvement.

External Benchmarking

The process of comparing a company's performance, products, or processes against those of leading competitors or industry standards.

Process Benchmarking

Examining and measuring business procedures and performance measures against top industry benchmarks or exemplary practices from different firms.

Lead Indicator

A predictive metric that anticipates future economic or business trends.