During Its First Year of Operation, Lenton Limited (A Public

question 74

Multiple Choice

During its first year of operation, Lenton Limited (a public company) acquired three securities as trading investments.Investment A cost $50,000 and had a year-end fair value of $60,000.Investment B cost $35,000 and had a year-end fair value of $20,000.Investment C cost $26,000 and had a year-end fair value of $24,000.What amount should be reported as an unrealized loss in Lenton's income statement for the first year of operation?

• A)$0
• B)$7,000
• C)$17,000
• D)$27,000

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Definitions:

Current Asset Turnover Ratio

A financial metric that measures the efficiency of a company's use of its current assets by comparing its net sales to its current assets.

Accounts Receivable

Money owed to a company by customers for goods or services that have been delivered or used but not yet paid for.

Inventory Management

The supervision of non-capitalized assets (inventory) and stock items, including ordering, storing, and utilizing a company's inventory.

Return on Common Equity (ROCE)

A measure of a company's profitability that takes the shareholder's equity into account.