LTI Corp.purchased 500 shares as a short-term investment for $5,100 on January 4,2017.The company received a 100% stock dividend on November 30,2017.The market value of one share on December 31,2017 was $6.30.The carrying value per share as at December 31,2017,would be:

Question

Quizplus · Accepted Answer

B) At year end the shares would be adjusted to the market value (the fair value) by debiting the fair-value valuation allowance for $1,200. This amount + cost = 6,300/1000 shares = $6.30 per share. A student will have to distinguish between cost and carrying value to get this answer correct.

LTI Corppurchased 500 Shares as a Short-Term Investment for $5,100 on on January