Yaro Company Owns 30% of the Common Stock of Dew

question 1

Multiple Choice

Yaro Company owns 30% of the common stock of Dew Co. and uses the equity method to account for the investment. During 2013, Dew reported income of $250,000 and paid dividends of $80,000. There is no amortization associated with the investment. During 2013, how much income should Yaro recognize related to this investment?

• A) $24,000.
• B) $75,000.
• C) $99,000.
• D) $51,000.
• E) $80,000.

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