On January 1, 20X4, Timber Company Acquired 25% of Johnson

question 47

Multiple Choice

On January 1, 20X4, Timber Company acquired 25% of Johnson Company's common stock at underlying book value of $200,000. Johnson has 80,000 shares of $10 par value, 6 percent cumulative preferred stock outstanding. No dividends are in arrears. Johnson reported net income of $270,000 for 20X4 and paid total dividends of $140,000. Timber uses the equity method to account for this investment.
-Based on the preceding information,what amount would be reported by Timber Company as the balance in its investment account on December 31,20X4?

• A) $200,000
• B) $220,500
• C) $232,500
• D) $255,500

---

Definitions:

Night Shift

A work schedule involving labor during the night hours, typically covering the period from late evening to early morning.

United States Supreme Court

The highest federal court in the U.S., with ultimate judicial authority to interpret and decide questions of federal law, including constitutional issues.

Sexual Harassment

Unwanted or inappropriate sexual advances, requests for sexual favors, and other verbal or physical harassment of a sexual nature in the workplace.