Use the Following Information for Questions

question 83

Multiple Choice

Use the following information for questions
Rodman Co.owns 3,000 of the 10,000 outstanding common shares of Gavin Corp.and exercises significant influence.During 2011, Gavin earns $60,000 and pays cash dividends of $20,000.
-Rodman should report investment revenue for 2011 of

• A)$6,000.
• B)$12,000.
• C)$18,000.
• D)$15,000.

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Definitions:

Qualified Indorsement

An indorsement on a negotiable instrument in which the indorser disclaims any contract liability on the instrument; the notation “without recourse” is commonly used to create a qualified indorsement.

Restrictive

Imposing limitations or conditions on use, action, or movement.

Bearer Instrument

A negotiable financial instrument that is payable to the holder or presenter.

HDC

Stands for Holder in Due Course, a term in commercial law referring to an individual who has acquired a negotiable instrument in good faith and for value, therefore, has certain protections.