On January 1, 20X7, Yang Corporation Acquired 25 Percent of the Outstanding

Multiple Choice

On January 1, 20X7, Yang Corporation acquired 25 percent of the outstanding shares of Spiel Corporation for $100,000 cash. Spiel Company reported net income of $75,000 and paid dividends of $30,000 for both 20X7 and 20X8. The fair value of shares held by Yang was $110,000 and $105,000 on December 31, 20X7 and 20X8 respectively.
-Based on the preceding information,what amount will be reported by Yang as income from its investment in Spiel for 20X8,if it used the equity method of accounting?

A) $7,500
B) $11,250
C) $18,750
D) $26,250