Question: Question Content Area On January 1 , Year 7 , Leaf Company acquired a 5 % interest in the Trunk Corporation through the purchase of

Question Content Area
On January 1, Year 7, Leaf Company acquired a 5% interest in the Trunk Corporation through the purchase of 100,000 shares of Trunk's common stock for $640,000; the investment is recorded on Leaf's books as trading securities. During Year 7, Trunk paid $40,000 in dividends and reported net income of $100,000. The market price of Trunk's common stock was $6.20 per share on December 31, Year 7. Leaf should report the investment in the Trunk Corporation on its December 31, Year 7, balance sheet at
a. $620,000.
b. $640,000.
c. $627,000.
d. $645,000.

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