Answer:
A, $286,000
Explanation:
Whenever there is equity method followed, for accounting of subsidiary then entire income and dividends received are accounted for in the cost of investment.
Here cost = $257,000
Add: all the incomes of Merriam = $40,000 + $47,000 = $87,000
Less: Any dividends received = $10,000 + $10,000 = $20,000
Less: Amortization = $19,000 + $19,000 = $38,000
Therefore, total carrying value = $257,000 + $87,000 - $20,000 - $38,000
= $286,000
In equity method therefore, carrying value on December 31, 2018 = $286,000
Final Answer
A, $286,000