bott company acquired 500 shares of stock of barus company at 50 per share as a long 558819

Bott Company acquired 500 shares of stock of Barus Company at $50 per share as a long term investment. This represents 40 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. $26,000

$0

c. $40,000

$16,000

d. $26,500

$16,000

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