The Following Information Pertains to Questions

question 50

Multiple Choice

The following information pertains to questions
GNR Inc owns 100% of NMX Inc.During the year,NMX Inc earned a net income of $40,000 and paid Dividends of $10,000.
-Assuming once again that GNR owned 80% of NMX instead of 100%,what would be the effect on GNR's investment in NMX account under the Cost Method?

• A)An increase of $30,000.
• B)An increase of $40,000.
• C)An increase of $24,000.
• D)No effect.

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