A Parent Company Received Dividends in Excess of the Parent

question 26

Short Answer

A parent company received dividends in excess of the parent company's share of the subsidiary's earnings subsequent to the date of the investment.How will the parent company's investment account be affected by those dividends under each of the following accounting methods?

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Definitions:

Basement Membrane

Secreted protein layer that attaches an epithelium to an underlying tissue.

Prokaryotes

Microorganisms characterized by the absence of a nucleus and other membrane-bound organelles, including bacteria and archaea.

Eukaryotes

Organisms whose cells contain a nucleus and other organelles enclosed within membranes.

Archaea

A domain of single-celled microorganisms that are genetically distinct from bacteria and eukaryotes, known for their ability to survive in extreme environments.