Evan Company reports net income of $140,000 each year and declares an annual cash dividend of $50,000.

Question:

Evan Company reports net income of $140,000 each year and declares an annual cash of $50,000. The company holds net assets of $1,200,000 on January 1, 2014. On that date, Shalina purchases 40 percent of the outstanding stock for $600,000, which gives it the ability to significantly influence Evan. At the purchase date, the excess of Shalina’s cost over its proportionate share of Evan’s book value was assigned to goodwill. On December 31, 2016, what is the Investment in Evan Company balance (equity method) in Shalina’s financial records?
a. $600,000.
b. $660,000.
c. $690,000.
d. $708,000.

Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...