Question

32. On February 15, Jewel Company buys 7,600 shares of Marcelo Corp. common stock at $28.59 per share plus a brokerage fee of $425. The stock is classified as available-for-sale securities. This is the company’s first and only investment in available-for-sale securities. On March 15, Marcelo Corp. declares a dividend of $1.21 per share payable to stockholders of record on April 15. Jewel Company received the dividend on April 15 and ultimately sells half of the Marcelo Corp. stock on November 17 of the current year for $29.36 per share less a brokerage fee of $280. The fair value of the remaining shares is $29.56 per share. The impact on Jewel’s net income as a result of its investment in Marcelo Corp. was a(n) (Round your intermediate dollar values to the nearest dollar amount):

Multiple Choice

Increase to income of $3,474.

Increase to income of $11,630.

Decrease to income of $2,434.

Increase to income of $6,355.

Decrease to income of $9,196.

32B. Cameroon Corp. manufactures and sells electric staplers for $15.40 each. If 10,000 units were sold in December, and management forecasts 3% growth in sales each month, the dollar amount of electric stapler sales budgeted for February should be:

32. A sporting equipment store expects to purchase $8,700 of ski boots in October. The store had $2,300 of ski boots in merchandise inventory at the beginning of October, and expects to have $1,300 of ski boots in merchandise inventory at the end of October to cover part of anticipated November sales. What is the budgeted cost of goods sold for October?

Answer 1

					In $
32	Purchase of shares		(7600*28.59)		217284
	Brokerage fees				425
	Total Purchase Price				217709
	Receipt of dividend				9196
	Sale of Investment		(3800*29.36)		111568
	Less : Brokerage fees				280
	Total Sales Price				111288
	Less : purchase price				-108855
	Profit on sale of investment				2433.5
	Fair Value of Remaining Shares		(3800*29.56)		112328
	Less : Actual purchase				108854.5
	Profit on revaulation				3473.5
	The Income would increase by 9196 + 2434				$11,630
32B	Dec	Jan	Feb
No of Units sold	10000	10300	10609
Unit price	15.4	15.4	15.4
	154000	158620	163378.60
In February electric stapler sales budgeted for February should be $ 163378.60
32					In $
	Beginning Inventory of Ski Boots				2300
	Add : purchases				8700
	Less : Closing inventory of Ski Boots				-1300
	Cost of goods sold for October				9700