In Lake’s 2010 income statement, how much should be reported for rental revenue?

a. $43,000

b. $48,000

c. $53,000

d. $53,800 Items  are based on the following data:

Lake Corporation’s accounting records showed the following investments at January 1, 2010:

Common stock:

Kar Corp. (1,000 shares) $ 10,000 Aub Corp. (5,000 shares) 100,000 Real estate:

Parking lot (leased to Day Co.) 300,000 Other:

Trademark (at cost, less accumulated amortization) 25,000 Total investments $435,000 Lake owns 1% of Kar and 30% of Aub. Lake’s directors constitute a majority of Aub’s directors. The Day lease, which commenced on January 1, 2008, is for ten years, at an annual rental of $48,000. In addition, on January 1, 2008, Day paid a nonrefundable deposit of $50,000, as well as a security deposit of $8,000 to be refunded upon expiration of the lease. The trademark was licensed to Barr Co. for royalties of 10% of sales of the trademarked items. Royalties are payable semiannually on March 1 (for sales in July through December of the prior year), and on September 1 (for sales in January through June of the same year).

During the year ended December 31, 2010, Lake received cash dividends of $1,000 from Kar, and $15,000 from Aub, whose 2010 net incomes were $75,000 and $150,000, respectively. Lake also received $48,000 rent from Day in 2010 and the following royalties from Barr:

March 1 September 1 2009 $3,000 $5,000 2010 4,000 7,000 Barr estimated that sales of the trademarked items would total $20,000 for the last half of 2010.