A Parent Company Received Dividends in Excess of the Parent

question 27

Multiple Choice

A parent company received dividends in excess of the parent company's share of the subsidiary's earnings subsequent to the date of the investment. How will the parent company's investment account be affected by those dividends under each of the following accounting methods?

• A) Cost Method, no effect; Partial Equity Method, no effect
• B) Cost Method, decreased; Partial Equity Method, no effect
• C) Cost Method, no effect; Partial Equity Method, decreased
• D) Cost Method, decreased; Partial Equity Method, decreased

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