Cozza Limited Acquired a 40% Investment in Hodgo Limited for $1

question 12

Multiple Choice

Cozza Limited acquired a 40% investment in Hodgo Limited for $1 000 000. Hodgo declared and paid a dividend of $20 000 during the current year. Cozza Limited does not prepare consolidated financial statements. Which of the following is the appropriate entry for Cozza to record this dividend?

• A) DR Cash $8000 CR Investment in associate $8000
• B) DR Dividends payable $8000 CR Cash $8000
• C) DR Cash $8000 CR Dividend revenue $8000
• D) DR Investment in associate $8000 CR Dividend revenue $8000

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Definitions:

Self-Perception Theory

The theory suggesting that individuals develop their attitudes and opinions by observing their own behavior and concluding what attitudes must have caused them.

Dissonance

A state of conflict or inconsistency between a person's beliefs, attitudes, or actions.

Norm Of Reciprocity

A social norm that dictates that a favor should be repaid in kind, fostering cooperation and social bonds.

Informational Social Influence

The process by which individuals change their attitudes or behavior to align with those of a group, due to the desire to be correct or to understand the proper way to act.