Nichols Enterprises has an investment in 31,500 bonds of Elliott Electronics that Nichols accounts for as a security available for sale. Elliott bonds are publicly traded, and The Wall Street Journal quotes a price for those bonds of $13 per bond, but Nichols believes the market has not appreciated the full value of the Elliott bonds and that a more accurate price is $24 per bond. Nichols should carry the Elliott investment on its balance sheet at:

Multiple Choice

• $756,000.

• Either $409,500 or $756,000, as either are defensible valuations.

• $582,750, the midpoint of Nichols' range of reasonably likely valuations of Elliott.

• $409,500.