During Its First Year of Operation, Lenton Limited Acquired Three

question 32

Multiple Choice

During its first year of operation, Lenton Limited 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

Appreciate the necessity of critical thinking skills in a global high-tech world.

Analyze the benefits of fostering a culture of critical thinking in workplaces.

Evaluate arguments and reasoning within discussions and written work critically.

Identify failures of critical thinking and understand their consequences.

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Definitions:

Net Income

Net income is the total profit of a company after all expenses, taxes, and costs have been subtracted from total revenues.

Dividends

Payments made by a corporation to its shareholders, usually as a distribution of profits.

Gross Profit Percentage

A financial ratio that expresses the gross profit as a percentage of sales revenue, indicating the efficiency of production and cost management.

Cost of Goods Sold

Costs directly related to the creation of a company's sold products, involving expenses for materials and workforce.