Question: On January 1 , 2 0 2 3 , the Leaf Company acquired a 5 % interest in the Trunk Corporation through the purchase of

On January 1,2023, the Leaf Company acquired a 5% interest in the Trunk Corporation through the purchase of 100,000 shares of Trunks common stock for $640,000 the investment is recorded on Leafs books as trading securities. During 2023, Trunk paid $40,000 in dividends and reported net income of $100,000. The market price of Trunks common stock was $6.20 per share on December 31,2023. Leaf should report the investment in the Trunk Corporation on its December 31,2020, balance sheet at
$620,000.
$627,000.
$640,000.
$645,000.

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