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how to calculate ending balance of an investment
Question
Harrison Co. owns 40% of the 50,000 outstanding shares of Taylor, Inc. common stock and uses the equity method to account for this investment. During 2013, Taylor earns. $1,200,000 and pays cash dividends of $960,000.
If the beginning balance in the investment account was $750,000, the balance at December 31, 2013 should be
a. $1,230,000.
b. $990,000.
c. $846,000.
d. $750,000.
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