Ewok Enterprises Recently Elected the Fair Value Option to Account

question 56

Multiple Choice

Ewok Enterprises recently elected the fair value option to account for its investment in Yoda Inc.Ewok purchased the shares for $210,000 and the shares are currently trading for $195,000 at year-end.What is the amount of gain or loss reported at year-end for this investment and where is this loss reported?

• A)Unrealized Loss of $15,000,reported as part of Net Income.
• B)Unrealized Loss of $15,000,reported as part of Other Comprehensive Income.
• C)Unrealized Gain of $15,000,reported as part of Net Income.
• D)Unrealized Gain of $15,000,reported as part of Other Comprehensive Income.

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Definitions:

NLRB

The National Labor Relations Board, a US government agency responsible for enforcing US labor law in relation to collective bargaining and unfair labor practices.

Bylaws

Rules that guide a corporation’s day-to-day internal affairs. Also known as regulations.

Secondary Boycott

Conspiracy in which a union places pressure on a neutral customer or supplier with whom the union has no dispute in order to cause the neutral entity to cease doing business with the employer with whom the union has a dispute.

National Emergency Strike

A work stoppage, sanctioned or enacted, during a declared national emergency to press for demands or protest issues.