On January 1, 20X4, Turtle Inc

question 24

Multiple Choice

On January 1, 20X4, Turtle Inc. bought 30% of the outstanding shares of Shell Corporation at a cost of $150,000. The equity method of accounting for this investment is used. During 20X4, Shell Corporation reported $40,000 of net earnings and paid $5,000 in cash dividends. At the end of 20X4, the shares had a market value of $160,000.
-How much investment income will Turtle report from the Shell investment during 20X4?

• A) $12,000
• B) $40,000
• C) $5,000
• D) $1,500

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