On January 1, 2016, Calas Company Acquired 40% of the Outstanding

Multiple Choice

On January 1, 2016, Calas Company acquired 40% of the outstanding voting common stock of Nick Company as a long-term investment. During 2016, Nick reported net income of $10,000 and declared and paid dividends of $4,000. During 2016, Calas Company should report equity in affiliate earnings of:

A) $5,600.
B) $4,000.
C) $2,400.
D) $10,000.