Lee, Inc. acquired 30% of Polk Corp's voting stock on January 1, year 1, for $100,000.
During year 1, Polk earned $40,000 and paid dividends of $25,000. Lee's 30% interest in Polk gives Lee the ability to exercise
significant influence over Polk's operating and financial policies. During year 2, Polk earned $50,000 and paid dividends of $15,000 on
April 1 and $15,000 on October 1.
On July 1, year 2, Lee sold half of its stock in Polk for $66,000 cash.
The carrying amount of this investment in Lee's December 31, year 1 Balance Sheet should be
$112,000.
$115,000.
$104,500.
$100,000.