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Question
Wendell Company owns 28% of the common stock of Porter Company and accounts for the investment using the equity method. Assuming that Wendell Company purchased the stock several years ago, the balance in the investment account would be equal to the original cost of the
a. investment
b. investment plus Wendell’s share of Porter’s net income earned since the investment was purchased
c. investment plus the total amount of dividends Wendell has received from Porter since the investment was purchased
d. investment plus Wendell’s share of Porter’s net income earned since the investment was purchased minus the total amount of dividends Wendell has received from Porter since the investment was purchased
Answer
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