Thivan Ltd $$\begin{array} { | l | c | } \hline \text { DR Cash } & 100,000 \\\hline \text { CR Investment in Thivan } & 100,000 \\\hline\end{array}$$

question 30

Multiple Choice

Thivan Ltd. is a wholly-owned subsidiary of Bateman Co. Thivan has declared dividends of $100,000.
- Bateman uses the equity method to record this investment and has properly reflected Thivan's dividend declaration on its books. What journal entry should Bateman make when it receives the dividends?

• A) \[\begin{array} { | l | c | }
• \hline \text { DR Cash } & 100,000 \\
• \hline \text { CR Investment in Thivan } & 100,000 \\
• \hline
• \end{array}\]
• B) \[\begin{array} { |l | c | }
• \hline \text { DR Cash } & 100,000 \\
• \hline \text { CR Dividend revenue } & 100,000 \\
• \hline
• \end{array}\]
• C) \[\begin{array} { | l | c | }
• \hline \text { DR Cash } & 100,000 \\
• \hline \text { CR Dividends receivable } & 100,000 \\
• \hline
• \end{array}\]
• D)No entry is required as the journal entry for dividends declared was already received.

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Definitions:

Market Prices

The current price at which a good or service can be bought or sold in an open market, determined by supply and demand dynamics.

Economic Profits

The surplus remaining after total costs are deducted from total revenues, accounting for both explicit and implicit costs.

Productive Land Resources

Land areas that are utilized or capable of being utilized for agricultural production, mining, or other economic activities.

Purely Competitive Economy

An economic model characterized by many buyers and sellers in the market, with none able to influence prices significantly.