Yankton Company Began the Year Without an Investment Portfolio

question 41

Multiple Choice

Yankton Company began the year without an investment portfolio.During the year,it purchased investments classified as available-for-sale securities at a cost of $13,000.At the end of the year,the market value of the securities was $11,000.The Yankton Company's financial statements for the current year should show

• A)a loss of $2,000 on the income statement and available-for-sale investments of $13,000 on the balance sheet
• B)no loss on the income statement and available-for-sale investments of $13,000 on the balance sheet
• C)no loss on the income statement,available-for-sale investments netting to of $11,000,and an unrealized loss of $2,000 as a stockholders' equity adjustment on the balance sheet
• D)a loss of $2,000 on the income statement and temporary investments of $11,000 on the balance sheet

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Definitions:

Volume-Based Product Costing

A costing methodology that assigns costs to products based on the volume of units produced, utilizing overhead rates calculated from total production volume.

Marginal Revenue

The additional income generated from selling one more unit of a good or service.

Marginal Cost Paradigm

The economic principle that examines the additional costs incurred from producing one more unit of a good or service.

Oligopolistic Market

A market structure characterized by a small number of large firms controlling the majority of market share, leading to competitive yet interdependent market dynamics.