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:

Monthly Compounded

The process of calculating interest each month and adding it to the total amount owed, thus earning interest on interest from the following month.

Semi-Annually Compounded

Describes the methodology of applying interest to a principal amount two times within a year.

Quarterly Payments

Payments made four times a year, typically for loans, mortgages, or other financial products.

Monthly Payments

Regular amounts paid each month towards the repayment of a loan or debt.