Company P Purchased a 30% Interest in Company S on January

Multiple Choice

Company P purchased a 30% interest in Company S on January 1, 20X1, for $100,000.The price was equal to the book value of the equity acquired.The reported income (loss) and dividends paid by the Company S are as follows: ?

$\begin{array}{rrr}& \text { Income } & \text { Dividends } \\\text { Year } & \text { ( loss ) } & \text { Paid } \\\hline20 \mathrm{X} 1 & \$ 5,000 & \$ 5,000 \\20 \mathrm{X} 2 & (270,000) & 0 \\20 \mathrm{X} 3 & (100,000) & 0 \\20 \mathrm{X} 4 & 50,000 & 5,000\end{array}$

Investment income reported in 20X4 under the sophisticated equity method would be ____.

A) -$15,000
B) -$13,500
C) -$4,000
D) -$0