Thivan Ltd B) C) D)No Entry Is Required Until the Dividends Are Paid

question 21

Multiple Choice

Thivan Ltd. is a wholly-owned subsidiary of Bateman Co. Thivan has declared dividends of $100,000.
- Under the equity method, what entry should Bateman record on its books?

• A) \[\begin{array} { | c | c | }
• \hline \text { DR Investment in Thivan } & 100,000 \\
• \hline \text { CR Dividend income } & 100,000 \\
• \hline
• \end{array}\]
• B) \[\begin{array} { | l | c | }
• \hline \text { DR Investment in Thivan } & 100,000 \\
• \hline \text { CR Equity in earnings of Thivan } & 100,000 \\
• \hline
• \end{array}\]
• C) \[\begin{array} { | c | c | }
• \hline \text { DR Dividends receivable } & 100,000 \\
• \hline \text { CR Investment in Thivan } & 100,000 \\
• \hline
• \end{array}\]
• D)No entry is required until the dividends are paid.

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