Answer:
A. The investment decreases by $771,000
Explanation:
As per the question the following details are given below :-
Net loss = $2,500,000
Total Dividend = $70,000
Owning Percentage = 30%
The computation of during the year is given below:-
Net loss + Total Dividend x Owning Percentage
= ($2,500,000 + $70,000) x 30%
= $2,570,000 x 30%
= $771,000
So, the Magnus investment in Mirika inc. reduces by $771,000
The investment decreases by $771,000, if the Magnus Tech possesses 30% of Mirika Inc. and accounts for the investment applying the equity method.
Investment is the faithfulness of an asset to accomplish a gain in value over a period of time.
Investment involves a forfeiture of any existing asset, such as time, money, or attempt.
In finance, the intention of investing is to produce an instrument from the invested asset.
According to the given information available,
Owning Percentage = 30%
Net loss = $2,500,000
Total Dividend = $70,000
The computation of change in investment in the given period.
[tex]\text{Investments} = \text{Net Loss}+ \text{Total Dividend} \times \text{Owning Percentage}\\\\\text{Investments}= (\$2,500,000 + \$70,000) \times 30\%\\\\\text{Investments} = \$771,000[/tex]
Therefore, option A is correct.
To learn more about the investments, refer to:
https://brainly.com/question/16822436
