On January 1,2014,Jonathon Company Purchased Common Stock in Garcia Company

question 120

Multiple Choice

On January 1,2014,Jonathon Company purchased common stock in Garcia Company for $1,000,000.Jonathon Company treats the investment as trading securities.During 2014,Garcia Company earned $4,000,000 and paid dividends of $1,000,000.Assume that Jonathon Company owns 10% of the outstanding shares of Garcia Company.The market value of the investment at December 31,2014 is $1,100,000.What is the balance in the Investment account at December 31,2014?

• A) $1,000,000
• B) $1,100,000
• C) $1,400,000
• D) $1,500,000

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