Bott Company acquired 500 shares of stock of Barus Company at $50 per share as a long term investment. This represents 10 percent of the outstanding voting shares of Barus. During the year, Barus paid stockholders $2 per share in dividends. At year end, Barus reported net income of $40,000. Barus’s stock price at the end of the year was $53 per share. For Bott Company, the amount of investments reported on the balance sheet at year end and the amount reported on the income statement for the year are:
|
Balance Sheet |
Income Statement |
|
a. $26,500 |
$1,000 |
|
b. $25,000 |
$1,000 |
|
c. $28,000 |
$4,000 |
|
d. $26,500 |
$4,000 |