On January 1, 2010, Garner Corporation purchased 25% of the common stock outstanding of Landon Corporation for $250,000. During 2010, Landon Corporation reported net income of $80,000 and paid cash dividends of $40,000. The balance of the Stock Investments-Landon account on the books of Garner Corporation at December 31, 2010 is

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The initial investment was $250,000 for 25% of Landon's common stock. Garner Corporation's share of Landon's net income for 2010 is 25% x $80,000 = $20,000. Garner Corporation's share of Landon's dividends in 2010 is also 25% x $40,000 = $10,000. Therefore, the balance of the Stock Investments-Landon account on the books of Garner Corporation at December 31, 2010 is $250,000 + $20,000 - $10,000 = $260,000.

On January 1, 2010, Garner Corporation Purchased 25% of the Common