When a company invests in another firm but does not exercise significant influence over that firm, the investment is typically classified as a passive investment. In such cases, the accounting method used is the fair value method. Under this approach, the investment is reported at fair value on the balance sheet, and any changes in that fair value are recognized as unrealized holding gains or losses in the income statement.
Jaycie Phelps Inc.'s investment in Theresa Kulikowski Inc. illustrates this concept well. Since there is no significant influence, the primary consideration is the fair value of the investment. Any increase in the fair value would be recorded as an unrealized holding gain, whereas a decrease would be recorded as an unrealized holding loss. Thus, the result of the investment, in this scenario, would solely be any unrealized holding gain or loss, which aligns with the correct answer.
Additionally, while cash dividends received or investment income might occur, these are not the main outcomes of the investment under the circumstances described, as the focus is specifically on the changes in fair value for passive investments.