On January 1, 2012, Gilman Company Purchased 10,000 of the 40,000

Multiple Choice

On January 1, 2012, Gilman Company purchased 10,000 of the 40,000 shares of common stock of Burke Corporation at $40 per share as a long-term investment. Gilman can exercise significant influence over Burke and properly records the investment using the equity method. The records of Burke Corporation showed the following at December 31, 2012: $$\begin{array} { | l | l | } \hline \text { Net Income } & \$ 500,000 \\\hline \text { Dividends Paid } & \$ 200,000 \\\hline \text { Market Price per Share } & \$ 38 \\\hline\end{array}$$ What amount should Gilman Company report in its December 31, 2012, balance sheet for its investment in Burke?

A) $380,000.
B) $400,000.
C) $475,000.
D) $425,000.