Parent Co. invested $5,000,000 in Sub Co. for 30% of its outstanding stock. At the time of the purchase, Sub Co. had a book value of $15,000,000. Sub Co. pays out 75% of net income in dividends each year.

Instructions
Use the information in the following T-account for the investment in Sub to answer the following questions.

(a) How much was Parent Co.€™s share of Sub Co.€™s net income for the year?
(b) How much was Parent Co.€™s share of Sub Co.€™s dividends for the year?
(c) What was Sub Co.€™s total net income for the year?
(d) What was Sub Co.€™s total dividends for theyear?

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Investment in Sub Co. 5,000,000 360,000 270,000