On February 15,Jewel Company Buys 7,000 Shares of Marcelo Corp

question 22

Multiple Choice

On February 15,Jewel Company buys 7,000 shares of Marcelo Corp.at $28.53 per share.The purchase is classified as a stock investment with insignificant influence.This is the company's first and only stock investment.On March 15,Marcelo Corp.declares a dividend of $1.15 per share payable to stockholders of record on April 15.Jewel Company received the dividend on April 30 and ultimately sells half of the Marcelo Corp.stock on November 17 of the current year for $29.30 per share.
-The fair value of the remaining shares is $29.50 per share at year-end.The amount that Jewel Company should report in the current-year income statement from its investment in Marcelo Corp.is:

• A)Unrealized Gain-Income; $10,295.
• B)Realized Gain-Income; $3,395.
• C)Unrealized Loss-Equity; $3,395.
• D)Unrealized Gain-Income; $3,395.
• E)Unrealized Loss-Income; $3,395.

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Definitions:

Diversified Portfolio

An investment strategy that spreads investments across various asset classes to reduce risk.

Stocks Worldwide

Equity securities issued by companies from around the globe, representing ownership interests in those businesses.

Capital Gain Distributions

Payments made to a fund's shareholders that result from the sale of securities in the fund's portfolio, where the gains are realized and then distributed to investors.

Income Distributions

The payment of earnings from investments, such as dividends from stocks or interest from bonds, to investors.