On January 2,20X1,Pencil Co

question 31

Multiple Choice

On January 2,20X1,Pencil Co.purchased 15 percent of Eraser,Inc.'s outstanding common shares for $500,000.Pencil is the largest single shareholder in Eraser and is able to exercise significant influence over Eraser.Eraser reported net income of $400,000 for 20X1 and paid dividends of $100,000.In its December 31,20X1,balance sheet,what amount should Pencil report as investment in Eraser?

• A) $485,000
• B) $500,000
• C) $545,000
• D) $560,000

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Definitions:

Macroeconomics

The branch of economics that is concerned with the overall ups and downs in the economy.

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