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What is the value of the investment in Company B

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Reference no: EM132923710

Question - Company A made an equity method investment in Company B in the amount of $500,000 during 2019; this represents a 40% stake in the company. During 2019, Company B announced earnings (net income) of $30,000 and paid a dividend of $5,000. During 20020, Company B announced a net loss of $10,000. Given this, what is the value of the investment in Company B on Company A's books at the end of 2020?

A. $507,500

B. $504,500

C. $500,000

D. $515,000

E. $506,000

Reference no: EM132923710

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