Intermediate Accounting II

On Feb 1 Year 1, Red Corp invested its excess cash in 20% of the common stock of Yellow Corp for $70,000. That year, Yellow declared and paid a dividend of $50,000 on all its common shares. On Dec 31, Year 1, Yellow reported net income of $1,500,000. And the market value of the stock was $80,000. What amount would Red report on its 20x1 balance sheet for Investment in Yellow? Significant influence exercised Significant influence NOT exercised A $360,000 $70,000 B $380,000 $70,000 C $360,000 $80,000 D $380,000 $80,000