Heartfelt Company Owns a 40% Interest in the Voting Common

Multiple Choice

Heartfelt Company owns a 40% interest in the voting common stock of Candle Corporation, and Heartfelt accounts for the investment using the equity method. During 2016, Candle Corporation reported net income of $100,000 and declared and paid cash dividends of $10,000. The carrying value of the Candle investment was $500,000 on January 1, 2016. At what amount is the Candle investment reported on the December 31, 2016 balance sheet of Heartfelt Company?

A) $496,000.
B) $500,000.
C) $536,000.
D) $540,000.