On January 1,2019,Turtle Inc

question 71

Multiple Choice

On January 1,2019,Turtle Inc.bought 30% of the outstanding shares of Shell Corporation common stock at a cost of $150,000.Turtle uses the equity method of accounting for this investment.During 2019,Shell Corporation reported $40,000 of net income and paid a total of $5,000 in cash dividends.At the end of 2019,the shares had a fair value of $160,000.
-How much investment income will Turtle report for equity in investee earnings during 2019?

• A)$12,000.
• B)$22,000.
• C)$10,500.
• D)$1,500.