Question
Central Investments bought 4,000 shares of Benet Company common stock on January 1, 20X1, for $20,000, and 4,000 shares of Roy Company common on July
Central Investments bought 4,000 shares of Benet Company common stock on January 1, 20X1, for $20,000, and 4,000 shares of Roy Company common on July 1, 20X1, for $24,000. Benet declared dividends on December 31, 20X1 of $3,000. At the end of 20X1, the fair value of Roy was $30,000 and the fair value of Benet was $28,000. At the end of 20X2, the fair value of Roy was $32,000 and the fair value of Benet was $24,000. These investments are reported in the long-term asset section of Centrals balance sheet. Central owns 8% of Benet Company and 12% of Roy Company.
How much income was reported on the 20X1 income statement?
Multiple Choice
A. $240
B. $14,240
C. $14,000
D. $0
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