Ever Financial paid $530,000 for a 20% investment in the common stock of Magic, Inc. For the first year, Magic reported net income of $200,000, and at year-end declared and paid cash dividends of $140,000. On the balance sheet date, the fair value of Ever's investment in Magic stock was $410,000. Read the requirements. Requirement 1. Which method is appropriate for Ever to use in accounting for its investment in Magic? Why? It would be appropriate for Ever to use the equity method of recording its investment in Magic, Inc. With a holding of this size, 20% of the common stock, it is probable that Ever can exercise significant influence on the operations of Magic, Inc. Requirement 2. Show everything that Ever would report for the investment and any investment revenue in its year-end financial statements. Balance Sheet (partial): Assets Current assets: Cash 200000 Income Statement (partial): TO i Requirements 1. Which method is appropriate for Ever to use in accounting for its investment in Magic? Why? 2. Show everything that Ever would report for the investment and any investment revenue in its year-end financial statements. TI