Bott Company acquired 500 shares of stock of Barus Company at $50 per share as a long-term investment. This represents 10 percent of the outstanding voting shares of Barus. During the year. Barus paid stockholders $2 per share in dividends. At year-end. Barus reported net income of $40,000. Barus’s stock price at the end of the year was $53 per share. For Bott Company, the amount of investments reported on the balance sheet at year-end and the amount reported on the income statement for the year are:
| Balance Sheet | Income Statement |
a. | $26,500 | $1,000 |
b. | $25,000 | $1,000 |
c. | $28,000 | $4,000 |
d. | $26,500 | $4,000 |
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