Detailed Answer
Correct answer: (A)
$1,100,000.
[Carrying value before new loss:
1.5 mill - (40% x 1 mill)) = 1.1 mill
Sox’s Share of net loss = 6 mill x 40% = 2.4 mill. Because the investment account cannot be reduced below zero. the loss reported in 2011 would b only 1.1 mill]