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.