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On January 1, 2014, as a long-term investment in available-for-sale securities, John Company purchased 1,000 of the 10,000 outstanding voting common shares of Wayne Corporation at $9 per share. Wayne reported 2014 net earnings of $30,000 and declared and paid cash dividends of
$20,000. The market price of the Wayne stock at the end of 2014 was $10 per share. Calculate the carrying value of John's investment at the end of 2014.
Retained Earnings
The portion of a company's profits not distributed as dividends to shareholders, but retained for reinvestment in the business or to pay off debt.
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