Use the Following Information for Questions
Desmond Corporation Owns $£ 49,800$

question 73

Multiple Choice

Use the following information for questions
Desmond Corporation owns 3,000 of the 10,000 outstanding ordinary shares of Wetmore Corporation.During 2011, Wetmore earned £2,400,000 and paid cash dividends of £800,000.
-Nagen Company had these transactions pertaining to share investments:
Feb. 1 Purchased 3,000 shares of Horton Company (10\%) for $£ 49,800$ cash plus brokerage fees of $£ 1,200$ .
June 1 Received cash dividends of $£ 2$ per share on Horton shares.
Oct. 1 Sold 1,200 Horton shares for $£ 24,000$ less brokerage fees of $£ 600$ .
The entry to record the receipt of the dividends on June 1 would include a

• A) debit to Share Investments for \( \{6,000 \).
• B) credit to Dividend Revenue for \( £ 6,000 \).
• C) debit to Dividend Revenue for \( £ 6,000 \).
• D) credit to Share Investments for \( £ 6,000 \).

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Definitions:

Related Party Transactions

Financial dealings between parties that have a relationship with the entity, which can include transactions with family members, key management personnel, or major shareholders.

Borrowed Money

Funds that are obtained through loans from banks, financial institutions, or other sources that must be repaid over time with interest.

AASB 124

An Australian Accounting Standards Board standard that requires the disclosure of financial relationships and transactions between related parties.

Insider Trading

The trading of a public company's stock or other securities by individuals with access to non-public, material information about the company.