Heartfelt Company Owns a 40% Interest in the Voting Common

question 83

Multiple Choice

Heartfelt Company owns a 40% interest in the voting common stock of Candle Corporation, accounted for using the equity method. During 2014, Candle Corporation reported net earnings of $100,000 and declared and paid cash dividends of $10,000. The carrying value of the Candle investment was $500,000 on January 1, 2014. At what amount is the Candle investment reported on the December 31, 2014 statement of financial position?

• A) $496,000.
• B) $536,000.
• C) $500,000.
• D) $540,000.

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Definitions:

Feline Lungs

The respiratory organs in cats, facilitating gas exchange necessary for metabolism and energy.

Human Lungs

The pair of respiratory organs located in the chest, responsible for gas exchange between the air and the blood, providing oxygen and removing carbon dioxide.

Pleura

A double-layered membrane surrounding each lung, providing lubrication and facilitating the lungs' movements during breathing.

Pericardium

The fibrous sac that surrounds the heart, providing it with protection and the lubrication necessary for efficient movement.