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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