32. On February 15, Jewel Company buys 7,600 shares of Marcelo Corp. common stoc

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?

Explanation / Answer

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

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