Question: Using the equity method, dividends received are not recorded as profit. Explain why this is true.

Using the equity method, dividends received are not recorded as profit. Explain why this is true.

Step by Step Solution

★★★★★

3.38 Rating (160 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock

Using the equity method dividends received from the investee company are not recorded as inco... View full answer

blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Fundamental Accounting Principles Questions!

Q:

Using the equity method, dividends received are not recorded as revenue. Explain why this is true.

Q:

Comparative balance sheet accounts of Laflamme Inc., which follows ASPE, and its statement of income for the year ending December 31, 2012, follow: The following is additional information about...

Q:

Fellows Inc., a publicly traded manufacturing company in the technology industry, has a November 30 fiscal year end. The company grew rapidly during its first 10 years and made three public offerings...

Q:

Select all that apply. ] Which of the following statements are true about accounting for investments using the equity method? Dividends received are reported as revenue. Net income of investee...

Q:

nvestments in Debt Securities 1 . When would a company classify a debt security as held - to - maturity, trading, or available for sale? 2 . Identify the accounts that are impacted for the following...

Q:

I keep getting a respond saying need more information "not clear" from the expert. What does that mean? This is all the homework assignment says and all ghe information is there in the two photos...

Q:

Equity and Available for Sale Trestments O'Brien Industries Inc. is a book publisher The available for sale investments at cost and fair value on December 31, 2014, are as follows: Issuing Company...

Q:

1 Equity security holdings between 20 and 50 percent indicates that the investor has a controlling interest over the investee. True False 2 The Unrealized Holding Gain/LossIncome account for equity...

Q:

1 Equity security holdings between 20 and 50 percent indicates that the investor has a controlling interest over the investee. True False 2 The Unrealized Holding Gain/LossIncome account for equity...

Q:

Equity and Available-for-Sale Investments O'Brien Industries Inc. is a book publisher. The available-for-sale investments at cost and fair value on December 31, 20Y4, are as follows: Issuing Company...

Q:

The above exhibits present the recent income statement and balance sheet of NBC Corporation. In general, the cash needed for NBC's operations is about 3 percent of revenue. Revenues in 2014 = $967...

Q:

Week 2: You are to define the phrases: a) Colloquial language in writing, b) Declarative statements in writing, c) paraphrasing, and c) Formal language in writing. Provide a short summary discussing...

Q:

Work out x and y. A B 40 45 105 Do C D

Q:

6. The Endangered Species Act stipulates that recovery plans be established for each listed species without regard to the cost of recovery. Using economic reasoning, explain what you perceive as the...

Q:

What purposes are served by a production cost report?

Q:

What purposes are served by a production cost report?

Q:

What is the difference between operations costing and a process costing system?

Q:

Question Two: (50 marks) ABC Sports is a manufacturer of sportswear. It produces all of its products in one department. The information for the current month is as follows: Beginning work in process...

Q:

You calculated that Maria needs to save $35,000 today to fund her daughter Sam's education in 7 years. She does not have the much money to set aside today. How much must she save each year in order...

Q:

2. If aging of A/R is used as the basis for estimating bad debt, what will be reported as bad debt expense in 20202 a) $11,300 b) $12,000 c) $8,300 d) $15,000 3. If 1% of 2020 sales is used as the...