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:

Question

Quizplus · Accepted Answer

The correct answer is D. Unrealized Gain-Income; $3,395.The sale of half of the Marcelo Corp. stock resulted in a realized gain of $3,395. The fair value of the remaining shares increased by $10,295, resulting in an unrealized gain. The total amount that Jewel Company should report in the current-year income statement from its investment in Marcelo Corp. is the sum of the realized gain and the unrealized gain, which is $3,395 + $10,295 = $13,690.

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