Calculation Of Year End Balance After Paying Dividends

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.

Summary

The question belongs to Accounting and it discusses about calculation of balance at the end of the year after paying cash dividends.

Total Word Count 29