Use the Following Information to Answer Questions

question 57

Multiple Choice

Use the following information to answer questions
Heart Company has a total of 750,000 shares issued.Diamonds Inc.purchases 150,000 of Heart shares for $10 \ share on January 1, 2011.On December 31, 2011, Heart has a net income of $125,000 and Heart shares are trading for $9.50 \ share.
-If this is a strategic investment, the balance in Diamond's investment in shares account on December 31, is:

• A)$1,425,000
• B)$1,450,000
• C)$1,500,000
• D)$1,525,000

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Definitions:

Bubble Gum

A type of chewing gum designed to be inflated out of the mouth as a bubble.

Income

Money received, especially on a regular basis, for work or through investments.

Blue Currency

Informal term possibly referring to a foreign currency held in accounts outside the country of origin, often in a stronger, more stable currency.

Ambrosia

In classical mythology, the food of the gods, believed to convey immortality; in contemporary contexts, a type of fruit salad.