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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