Kent Corporation holds 1,900 shares of Russell Corporation common stock as its sole long-term investment.Kent does not have significant influence or control over Russell.The stock was purchased during 2013 at a price of $120 per share.On December 31,2013,the market price of Russell's stock was $108 per share.On December 31,2014,the market price of Russell's stock was $136 per share.What should be reported as the carrying value of the investment on Kent's December 31,2013,and December 31,2014,balance sheets,respectively?
A)$228,000;$228,000
B)$205,200;$228,000
C)$205,200;$205,200
D)$205,200;$258,400

Question

Quizplus · Accepted Answer

On December 31, 2013, the investment should be reported at its market value of $108 per share, totaling $205,200 (1,900 shares * $108). On December 31, 2014, the investment should be adjusted to its new market value of $136 per share, totaling $258,400 (1,900 shares * $136).

Kent Corporation Holds 1,900 Shares of Russell Corporation Common Stock