Use the Following Information for Questions

question 68

Multiple Choice

Use the following information for questions
Fossil Company purchased 200 of the 1,000 outstanding shares of Ericksen Company's common shares for $60,000 on January 2, 2011.During 2011, Ericksen Company declared dividends of
$10,000 and reported earnings for the year of $40,000.
-If Fossil Company uses the equity method of accounting for its investment in Ericksen Company, its Investment in Ericksen Company account at December 31, 2011 should be

• A)$58,000.
• B)$66,000.
• C)$60,000.
• D)$68,000.

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Definitions:

Hard Currency

A currency that is widely accepted around the world as a form of payment and is known for its stability and reliability.

Inflation

The rate at which the general level of prices for goods and services is rising, and subsequently, purchasing power is falling.

National Bank

A financial institution chartered by the government of a country, responsible for providing financial services to the government and playing an important role in the country's economy.