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Farmer Corporation purchases 45% of the common stock of Jackson, Inc. at a purchase price...

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Accounting

Farmer Corporation purchases 45% of the common stock of Jackson, Inc. at a purchase price of $13.5 million cash. During the year, Jackson reports net income of $1,850,000 and pays $340,000 of cash dividends. At the end of the year, the market value of Farmers investment is $14.8 million.

What is the year-end balance of the equity investment in Jackson?

a. $14,179,500

b. $15,010,000

c. $14,332,500

d. $13,500,000

e. None of the above

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