Providence Corporation makes an equity-method investment in Southampton Inc. at a purchase price of $3.4 million cash, representing 30% (at book value. of Southampton Inc. During the year, Southampton reports net income of $985,000 and Providence receives $675,000 of cash dividends from Southampton. At the end of the year, the market value of Providence’s investment is $3.1 million. At year end, what does Providence Corporation report on its balance sheet for its investment in Southampton Inc.?
a. $3,710,000
b. $3,400,000
c. $3,100,000
d. $3,020,500
e. None of the above