On January 2,20X5,Well Co

question 53

Multiple Choice

On January 2,20X5,Well Co.purchased 10 percent of Rea,Inc.'s outstanding common shares for $400,000.Well is the largest single shareholder in Rea,and Well's officers are a majority on Rea's board of directors.As a result,Well is able to exercise significant influence over Rea.Rea reported net income of $500,000 for 20X5,and paid dividends of $150,000.In its December 31,20X5,balance sheet,what amount should Well report as investment in Rea?

• A) $385,000
• B) $450,000
• C) $400,000
• D) $435,000

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Definitions:

Good Judge Of Personality

A term describing individuals who have the ability to accurately understand and assess others' personalities, emotions, and motivations.

Extraversion

A personality trait described by the tendency to be sociable, outgoing, and energized by interactions with others.

Openness

One of the five major dimensions of personality in the Big Five personality traits, characterized by imagination, curiosity, and a broad range of interests.

Agreeableness

A personality trait characterized by compassion, cooperativeness, and a desire to maintain positive social relations.