At what amount is the Candle investment reported on the December 31,2019 balance sheet of Heartfelt Company?

A) $496,000.
B) $500,000.
C) $536,000.
D) $540,000.

Equity Method

The equity method is an accounting technique used for recording investments in other companies, where the investment is initially recorded at cost and adjusted thereafter for the investing company’s share of the investee’s profits or losses.

Carrying Value

The original cost of an asset, less any accumulated depreciation, amortization, or impairment costs, representing its value on the balance sheet.

Investment Account

A financial account held at a financial institution that contains securities, cash, and other assets, typically used for investing purposes.