On January 1, 2016, Conner Corporation purchased 100,000 of the 400,000 shares of outstanding stock of JJ Company for $560,000. Net income reported by JJ Company for 2016 was $600,000
Dividends declared and paid by JJ Company during 2016 were $130,000. The Equity-method Investment will be reported on Conner Corporation's December 31, 2016 balance sheet in the amount of:
A) $560,000.
B) $592,500.
C) $677,500.
D) $742,500.
C
Explanation: C) $560,000 + ($600,000 × 0.25 ) - ($130,000 × 0.25 ) = $677,500
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