On February 15 Jewel Company buys 7100 shares of Marcelo Cor

On February 15. Jewel Company buys 7100 shares of Marcelo Corp. common at $28.54 per share plus a brokerage fee of $405. The stock is classified as available-for-sale securities. On March 15, Marcelo declares a dividend of $116 per share payable to stockholders of record on April 15. Jewel Compa received the dividend on April 15 and ultimately sells holf of the Marcelo Corp. stock on November 17 of the current year for $29.31 per share less o brokerage fee of $255. The fair value of the remaining 3,550 shares is $29.51 per share. The amount that Jewel Company should report in the asset section of its year-end December 31 balance sheet for its investment in Marcelo Corp. is: ny O s104760 O $203,039 O $3.241 O $2.276 O $5.580. References Multiple Choice O Type here to search

Solution

Answer a. $104,760 Cost of 7,100 shares of Marcelo Corp. = 7,100 shares X $28.54 + $405 (brokerage fees) Cost of 7,100 shares of Marcelo Corp. = $203,039 Cost of 3,550 Shares = $203,039 X 3,550 / 7,100 Cost of 3,550 Shares = $101,519.50 Fair Value of 3,550 Marcelo Shares = 3,550 shares X $29.51 Fair Value of 3,550 Marcelo Shares = $104,760.50 or say $104,760 (Approx.) Amount of Investment Shown in the Assets Section on Dec 31 = $104,760