Q 66

Heartfelt Company owns a 40% interest in the voting common stock of Candle Corporation,and Heartfelt accounts for the investment using the equity method.During 2019,Candle Corporation reported net income of $100,000 and declared and paid cash dividends of $10,000.The carrying value of the Candle investment was $500,000 on January 1,2019. How much investment income should Heartfelt report during 2019 from the Candle investment? A)$36,000. B)$40,000. C)$4,000. D)$10,000.

Multiple Choice