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 fair value method of accounting?

A) $11,250
B) $2,500
C) $6,250
D) $7,500