Berlin Corporation purchases an investment in Best Pictures, Inc. at a purchase price of $3 million cash, representing 45% of the book value of Best Pictures. During the year. Best Pictures reports net income of $350,000 and pays $90,000 of cash dividends. At the end of the year, the market value of Berlin's investment is $3.7 million. What is the year-end balance of the equity investment in Best Pictures? a. $3,000,000 b. $3,117,000 C. $3,157,500 d. $3,260,000 e. $3,700,000 Answer is b :year-end balance of the investment account is computed as follows: Beginning balane$3,000,000+ Share of investee's net income 157,500($350,000 times 45%)- Dividends received from Best Pictures(40,500)($90,000 times 45%)Ending balance$3,117,000 7) Principe holds a 10% equity investment in Del Fuego Inc. Clearwater Investments holds 40% of Del Fuego's stock. On April 1, 2015, Del Fuego declares and pays dividends to its stockholders. How will the dividend affect each company's balance sheet account: Del Fuego investment