Amacon Corporation Has the Following Investments at December 31, 2020

question 108

Multiple Choice

Amacon Corporation has the following investments at December 31, 2020: $$\begin{array} { | l | r | r | r | r | } \hline & \text { Historical cost } & \begin{array} { c } \text { Fair value } \\\text { Sept } 30,2019\end{array} & \begin{array} { c } \text { Fair value } \\\text { Sept 30, 2020 }\end{array} & \begin{array} { c } \text { Fair value } \\\text { Dec } 31,2020\end{array} \\\hline \text { Shares of DEF } & 25,000 & 15,000 & 27,000 & 30,000 \\\hline \text { Bonds of Brooke } & & & & \\\text { (purchased at par value) } & 10,000 & 12,000 & 11,000 & 12,500 \\\hline \text { Shares of CooksTown } & 12,000 & 18,000 & 16,000 &16,000\\\hline \text { Shares of Daisy } & 18,000 & 16,500 & 19,500 &20,500 \\\hline\end{array}$$ If Amacon irrevocably elected to classify its investment in DEF at fair value through OCI, what amount will be reported in income for the three months ended December 31, 2020 pertaining to this investment?

• A)$0
• B)$3,000 loss.
• C)$3,000 gain.
• D)$5,000 gain.

---

Definitions:

Indirect Compensation

Benefits given to employees that are not paid directly as cash but contribute to their overall remuneration, such as insurance or retirement plans.

Bonuses

Additional financial compensation awarded to employees as a reward for their exceptional performance or achievement.

Commissions

A type of incentive pay calculated as a percentage of the employee's sales or performance.

Competency-Based Pay System

A compensation approach that rewards employees based on their skills, abilities, and achievements rather than their job title or position.