Jack Corporation Purchased a 20% Interest in Jill Corporation for $1,500,000

Jack Corporation purchased a 20% interest in Jill Corporation for $1,500,000 on January 1, 2009. Jack can significantly influence Jill. On December 10, 2009, Jill declared and paid $1 million in dividends. Jill reported a net loss of $6 million for the year. What amount of loss should Jack report in its income statement for 2009 relative to its investment in Jill?

A) $1 000,000.
B) $1,200,000.
C) $1,400,000.
D) $1,500,000.Carrying value before net loss: ($1,500,000 (20% $1,000,000) ) = $1,300,000
Jack's share of net loss would be recognized in full: 20% $6,000,000 = $1,200,000.