Question - On January 1, 2011, Anderson Company purchased 40% of the voting common stock of Barney Company for $2,000,000, which approximated book value. During 2011, Barney paid dividends of $30,000 and reported a net loss of $70,000.
What amount of equity income would Anderson recognize in 2011 from its ownership interest in Barney?
A. $12,000 income
B. $12,000 loss
C. $16000 loss
D. $28000 income
E. $28,000 loss (correct)