In January 2020, Domingo, Inc., acquired 20 percent of the outstanding common stock of Martes, Inc., for $739,000. This investment gave Domingo the ability to exercise significant influence over Martes, whose balance sheet on that date showed total assets of $4,043,000 with liabilities of $983,000. Any excess of cost over book value of the investment was attributed to a patent having a remaining useful life of 10 years.

In 2020, Martes reported net income of $219,000. In 2021, Martes reported net income of $282,000. Dividends of $80,000 were declared in each of these two years. What is the equity method balance of Domingos Investment in Martes, Inc., at December 31, 2021?

Multiple Choice

• $877,800.

• $781,800.

• $890,500.

• $807,200.