Tupelo Corporation Used the Equity Method to Account for a 25

question 133

Multiple Choice

Tupelo Corporation used the equity method to account for a 25% ownership interest in Jordan Corporation. If Jordan Corporation reports $300,000 of income and pays $60,000 of dividends, the net effect of the entries made by Tupelo Corporation will be to:

• A)increase the Investment account by $240,000.
• B)reduce the Investment account by $240,000.
• C)increase the Investment account by $60,000.
• D)reduce the Investment account by $60,000.

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Definitions:

Mortgages

Legal agreements in which a lender lends money at interest in exchange for taking title of the borrower's property, with the condition that the conveyance of title becomes void upon the payment of the debt.

Mortgage

A legal agreement by which a bank, credit union, or other lender lends money at interest in exchange for taking title of the borrower's property, with the condition that the conveyance of title becomes void upon the payment of the debt.

Default

The failure to fulfill a legal obligation, such as not making a scheduled payment on a loan.

Public Restrictions

Legal limitations placed by government entities on how properties can be used, often to designate zoning and land use.