Answered: Dividends received on an equity-method…

Dividends received on an equity-method investmenta. decrease the investment account.b. increase stockholders’ equity.c. increase dividend revenue.d. increase the investment account.

Survey of Accounting (Accounting I)

8th Edition

ISBN:9781305961883

Author:Carl Warren

Publisher:Carl Warren

Chapter9: Metric-analysis Of Financial Statements

Section: Chapter Questions

Problem 12CDQ

See similar textbooks

Related questions

Q: Sub Sandwiches of America made the following expenditures related to its restaurant: 1. Replaced the...

Q: What is the purpose of a range check?

A: Internal controls are the controls established within an organization to check errors and frauds wit...

Q: Starts Inc. produces a product for which the standard specifies 4 yards of material per unit. The s...

A: As posted multiple sub parts we are answering only first three sub parts kindly repost the unanswere...

Q: Little King acquires land and an old building across the street from Northwestern State University. ...

A: Cost of Land and building: The cost of land and building includes the following costs: Purchase pri...

Q: Tony and Suzie are ready to expand Great Adventures even further in 2022. Tony believes that many gr...

A: Introduction: Bad debt expenses: Bad debt expenses: Bad debt expenses refer to the loss that arise b...

Q: A company has cost of goods sold of $85,000 and ending inventory of $18,000. Its days’ sales in inve...

A: Given, A company have the cost of goods sold at the rate of $85,000 and the ending inventory having ...

Q: Contractors Depot Co is an established builders’ merchant, and a new audit client of your audit firm...

A: Every business has risks while going through the processes. In Auditing, there are types of risks a...

Q: Starts Inc. gathered the following data for use in developing the budgets for the first quarter (Jan...

A: Direct Labor Budget : A direct labor budget keeps track of all the labor-related expenses as they ...

Q: Coleman Motors, Inc., was formed on January 1,2018. The following transactions occurred during 2018:...

A: 1. Income statement:

Q: What two different accounting equalities must be maintained in transaction analysis?

A: In transaction analysis, accounting equalities are: Assets = Laibilities + Shareholders Equity Debi...

Q: 1. What is the importance of S114 in the Australian taxation system? Discuss about“South Australia &...

A: Hello. Since your question has multiple parts, we will solve the first question for you. If you want...

Q: Use this information for Stringer Company to answer the question that follow. The following data are...

A: Direct material quantity variance = ( Standard quantity allowed - actual quantity of materials used ...

Q: Explain why writing off a bad debt against the Allowance for Doubtful Accounts does not reduce the e...

A: The writing off a bad debt against the allowance for doubtful accounts does not reduce the estimated...

Q: E7-22A. (Learning Objective 1: Measure the cost of plant assets) Murphy Self Storagepurchased land, ...

A: Given information is: Murphy Self Storage purchased land, paying $160,000 cash as a down payment and...

Q: The internal control procedures in Philips Company make the following provisions. Identify the princ...

A: Employees have physical custody of assets but do not have access to accounting records – Responsibil...

Q: HARDA Fashion sells ready-to-wear fashion clothes to teenagers. The company has a 20-store chain con...

A: Accounting system is the internal control system which is used to manage all the activities related ...

Q: Determine whether each cash receipts procedure is an internal control strength or weakness. 1. If a ...

A: Internal Controls: Internal controls are the controls established within an organization to check er...

Q: The leverage ratio is equal to average total __________divided by average _________________.a. long-...

A: Leverage ratio: It overlooks the mixture of debt and equity which is required for analyzing the abil...

Q: You are the financial officer for Music Plus, a retailer that sells goods for home entertainment nee...

A: Inventory: Inventory consist of total of three components: raw material, work-in-process and finishe...

Q: Palmona Co. establishes a $200 petty cash fund on January 1. On January 8, the fund shows $38 in cas...

A: Petty cash fund: Petty cash fund is a fund established to pay insignificant amounts like postage, of...

Q: The following information is available for Hapley Co.∙ November 30 bank statement shows a $1,895 bal...

A: Bank Reconciliation statement: Bank reconciliation statement is a report that summarized the banki...

Q: Brunswick borrows $50,000 cash from Third National Bank. How does this transaction affect the accoun...

A: Given transaction is: Brunswick borrows $50,000 cash from Third National Bank.

Q: On the first day of the fiscal year, a company issues a $1,100,000, 6%, 9-year bond that pays semian...

A: When a bond issued for a amount more than its face value then the excess amount received would be cr...

Q: Santa Fe Retailing purchased merchandise “as is” (with no returns) from Mesa Wholesalers with credit...

A: 1.

Q: Starts Inc. gathered the following data for use in developing the budgets for the first quarter (Jan...

A: Sales Budget : Sales budget is the first and basic component of master budget and it shows the expe...

Q: Amalia Company received its utility bill for the current period of $700 and immediately paid it. Its...

A: Journal Entry: It refers to the process of recording the data into books of accounts on continuous b...

Q: A distributor of artistic iron-based fixtures acquires a piece for $1,000, terms FOB shipping point....

A: Cost of Inventory: It can be defined as the cost of buying the merchandise, deducting any discount a...

Q: Brownlee Company issued $525,000, 8%, six-year bonds for 110, with interest paid annually.Assuming s...

A: Carrying value: The face amount of bond, less unamortized discount, or plus unamortized premium, is ...

Q: Return on equitya. is a measure of the ratio of net income to dividends declared.b. is calculated fo...

A: Ratio analysis: It can be defined as a quantitative method of analyzing the financial statements of ...

Q: a) ISA 315 Identifying and Assessing the Risks of Material Misstatement through Understanding the En...

A: Internal control system is the rules, procedures and mechanisms to be conducted internally within th...

Q: ASSIGNMENT DETAILSAnalysing the Accounting Information System of HARDA Fashion. HARDA Fashion sells ...

A: “Since you have posted a question with multiple sub-parts, we will solve first three sub-parts for y...

Q: he following data are given for Bahia Company: Budgeted production 1,032 units Actual productio...

A: Variance: Variance refers to the difference level in the actual cost incurred and standard cost. The...

Q: uarez Department Store has derived the following data from the store’s operations in the year ended ...

A: Since the question has more than 3 sub-parts, the first 3 subparts are answered. If you want the ans...

Q: All of the following are reported as current liabilities except:a. interest payable.b. bonds payable...

A: Current Liabilities are those liabilities or obligations which are due or to be paid in 12 months. F...

Q: “In an EDI system, only the customer needs to verify that the order being placed is from a valid sup...

A: Electronic Data Interchange: Electronic data interchange (EDI) is the channel between the compute...

Question

Dividends received on an equity-method investment
a. decrease the investment account.
b. increase stockholders’ equity.
c. increase dividend revenue.
d. increase the investment account.

Expert Solution

Step 1

Under the equity method of investment, when dividends are received by the investor then it will decrease the investment account of the investor.

Step by step

Solved in 2 steps

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

Cash dividends declared out of current earnings were distributed to an investor. How will the investors investment account be affected by those dividends under each of the following accounting methods?
Owners equity represents which of the following? A. the amount of funding the company has from issuing bonds B. the sum of the retained earnings and accounts receivable account balances C. the total of retained earnings plus paid-in capital D. the business owners/owners share of the company, also known as net worth or net assets
What is the impact on the accounting equation when stock is issued, in exchange for assets? A. both sides increase B. both sides decrease C. only the Asset side changes D. neither side changes
The cost of equity is _______. A. the interest associated with debt B. the rate of return required by investors to incentivize them to invest in a company C. the weighted average cost of capital D. equal to the amount of asset turnover
Stockholders can best be defined as which of the following? A. investors who lend money to a business for a short period of time B. investors who lend money to a business for a long period of time C. investors who purchase an ownership in the business D. analysts who rate the financial performance of the business
Quiz 2: Solvency Debt-to-equity ratio Times interest earned ratio Debt service coverage ratio Cash flow from operations to capital expenditures ratio Profitability Return on assets ratio Return on sales ratio Asset turnover ratio Return on common stockholders equity ratio Leverage Earnings per share (EPS) Price/earnings (P/E) ratio Dividend payout ratio Dividend yield ratio A measure of a companys success in earning a return for the common stockholders. The relationship between a companys performance according to the income statement and its performance in the stock market. The ability of a company to remain in business over the long term. A variation of the profit margin ratio; measures earnings before payments to creditors. A companys bottom line stated on a per-share basis. The percentage of earnings paid out as dividends. The ratio of total liabilities to total stockholders equity. A measure of the ability of a company to finance long-term asset acquisitions with cash from operations. A measure of a companys success in earning a return for all providers of capital. The relationship between net sales and average total assets. The relationship between dividends and the market price of a companys stock. The use of borrowed funds and amounts contributed by preferred stockholders to earn an overall return higher than the cost of these funds. An income statement measure of the ability of a company to meet its interest payments. A statement of cash flows measure of the ability of a company to meet its interest and principal payments. How well management is using company resources to earn a return on the funds invested by various groups.
Retained earnings is accurately described by all except which of the following statements? A. Retained earnings is the primary component of a companys earned capital. B. Dividends declared are added to retained earnings. C. Net income is added to retained earnings. D. Net losses are accumulated in the retained earnings account.
When recording dividends received from a stock investment accounted for using the equity method, which of thefollowing statements is true?a. Total assets are increased and net income is increased.b. Total assets are increased and total stockholders’ equityis increased.c. Total assets are decreased and total stockholders’equity is decreased.d. Total assets and total stockholders’ equity do notchange
The increases in stockholders' equity attributable to selling services or products to customers are called a.liabilities b.revenues c.expenses d.assets
Which one of the following normally has a net debit balance? A. Contributed capital that is in shareholders’ equity. B. Retained earnings that is in shareholders’ equity. C. Dividends that decrease retained earnings Revenues that increase retained earnings. D. Revenues that increase retained earnings
Which of the alternatives results from the accrual of interest: a.Increase in liabilities and decrease in stockholders' equity. b.Increase in assets and stockholders' equity. c.Increase in assets and liabilities. d.Increase in liabilities and increase in stockholders' equity.
Under the equity method, the receipt of a cash dividend would include a: Group of answer choices credit to Gain on Sale of Investments. credit to Investment in Peas Company. a debit to Investment in Peas Company. debit to Gain on Sale of Invesments.