Practice Questions for Test 3 Background: The fiscal year is winding down and the company you work for is counting on you to run some analysis on company financials. The company had a great year, but the managers want a second set of eyes to look at these numbers. Determine the answer to the following situation and report back to your manager. Lennon Corporation accounts for its 30% investment in Harrison Corporation using the equity method of accounting. The investment cost $620,000 on 1/1/1. During 1, Harrison reported net income of $500,000 and paid total dividends of $100,000 during X1. On December 31, 20x1, the balance in Lennon Corporation's Investment in Harrison account will equal A. $500,000 B. $680,000 C. $740,000 D. $770,000 E. $1,020,000