Barking Power Company Accounts for Its 35% Investment in Pipeline

Multiple Choice

Barking Power Company accounts for its 35% investment in Pipeline Corporation under the equity method of accounting. The investment was made on January 1, 2020, at a cost of $625,000. Pipeline Corporation reported net income of $85,000 for the year ended December 31, 2020, and paid total dividends of $20,000 during 2020. On December 31, 2020, after making all appropriate entries, the balance in Barking Power Company's Long-Term Investment account will equal:

A) $647,750
B) $583,000
C) $690,000
D) $602,250