Use the Following Information for Questions 105 and 106

question 89

Multiple Choice

Use the following information for questions 105 and 106.
Brown Corporation earns $480,000 and pays cash dividends of $160,000 during 2014. Dexter Corporation owns 3,000 of the 10,000 outstanding shares of Brown.
-How much investment income should Dexter report in 2014?

• A) $160,000.
• B) $144,000.
• C) $96,000.
• D) $480,000.

---

Definitions:

Winding-Up Process

A formal procedure in which a company's assets are liquidated and liabilities are paid off before the company is dissolved.

Fiduciary Duty

A legal obligation of one party to act in the best interest of another. The obligated party is typically in a position of trust, such as a financial advisor or trustee.

Rightful Dissolution

The legally justified process of formally ending the existence of an entity, such as a corporation or partnership.

Managing Partner

A member of a partnership who is responsible for its day-to-day operations and has the authority to make managerial decisions.