Heartfelt Company Owns a 40% Interest in the Voting Common

question 50

Multiple Choice

Heartfelt Company owns a 40% interest in the voting common stock of Candle Corporation,accounted for using the equity method.During 2010,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 1,2010.How much income should Heartfelt report during 2010 from the Candle investment?

• A)$200,000.
• B)$40,000.
• C)$4,000.
• D)$10,000.

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Definitions:

Pressure Gradient

A pressure gradient is the difference in pressure across a physical space, which drives the flow of fluids from regions of higher to lower pressure.

Volume Gradient

The difference in concentration of a substance across a space or a membrane, often driving diffusion or movement of substances.

Temperature Gradient

The rate of temperature change in space, reflecting differences in temperature over a specified distance.

Diffusion Gradient

A variance in concentration that permits molecules to move passively from an area of higher concentration to an area of lower concentration.