On January 1,20X7,Yang Corporation Acquired 25 Percent of the Outstanding

question 16

Multiple Choice

On January 1,20X7,Yang Corporation acquired 25 percent of the outstanding shares of Spiel Corporation for $100,000 cash.Spiel Company reported net income of $75,000 and paid dividends of $30,000 for both 20X7 and 20X8.The fair value of shares held by Yang was $110,000 and $105,000 on December 31,20X7 and 20X8 respectively.
-Based on the preceding information,what amount will be reported by Yang as income from its investment in Spiel for 20X7,if it used the fair value method of accounting?

• A)$17,500
• B)$12,500
• C)$11,250
• D)$7,500

---

Definitions:

Psychological Dependence

A condition in which an individual feels a compelling emotional need to continue using a substance.

Physical Dependence

A physiological state of adaptation to a substance, characterized by the onset of withdrawal symptoms when the substance is reduced or discontinued.

Psychoactive Drugs

Substances that affect the mind, altering mood, perception, or consciousness when ingested or otherwise introduced into the body.

Hallucinogens

Substances that cause profound changes in perception, thought, and mood, often leading to visual or auditory hallucinations.