On January 1, 20X4, Pony Company acquired 25% of Stallion Company’s common stock at underlying book value of $200,000. Stallion has 80,000 shares of $10 par value, 6 percent cumulative preferred stock outstanding. No dividends are in arrears. Stallion reported net income of $270,000 for 20X4 and paid total dividends of $140,000. Pony uses the equity method to account for this investment. Based on the preceding information, what amount would be reported by Pony Company as the balance in its investment account on December 31, 20X4? Multiple Choice A. $200,000 B. $232,500 C. $220,500 D. $255,500

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Consolidation

Consolidation in general examination implies an asset oscillating between well-defined methods of trading status. Consolidation is commonly known as market indecisiveness, which completes when the asset's values move forward or backward the trading structure.