Heartfelt Company Owns a 40% Interest in the Voting Common

question 6

Multiple Choice

Heartfelt Company owns a 40% interest in the voting common stock of Candle Corporation, and Heartfelt accounts for the investment using the equity method. During 2014, Candle Corporation reported net income 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 balance sheet?

• A) $496,000.
• B) $500,000.
• C)$536,000.
• D)$540,000.

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Definitions:

Diffusion

The movement of particles from an area of higher concentration to an area of lower concentration, leading to an even distribution.

Gas Exchange

The biological process through which different gases (like oxygen and carbon dioxide) are transferred in opposite directions across a respiratory surface.

Erythrocytes

Red blood cells that carry oxygen from the lungs to the body tissues and carbon dioxide from the tissues back to the lungs.

Nuclei

The plural of nucleus, referring to the membrane-bound organelles that contain the genetic material in eukaryotic cells.