Forest Ltd

question 17

Multiple Choice

Forest Ltd. reports its investment in Leeds Co. on an equity basis. During the year, Forest received $10,000 in dividends from Leeds. How should Forest report these dividends?

• A)As an increase to the "Investment in Leeds Co." account on its statement of financial position
• B)As a decrease to the "Investment in Leeds Co." account on its statement of financial position
• C)As dividend income on its statement of changes in equity-retained earnings section
• D)As dividend income in its statement of comprehensive income

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Definitions:

Article 2

A section of the Uniform Commercial Code that governs the sale of goods in the United States.

Article 2(A)

Generally refers to a specific section within a broader legal document or statute, often needing context for precise definition.

Lease

A contractual agreement where one party (the lessee) is granted the right to use property owned by another party (the lessor) for a specified period in exchange for periodic payments.

Exist Physically

To have a presence or form that can be touched, seen, or felt in the material world.