E$2-1$ Multiple$-$Choice Questions on Use of Cost and Equity Methods $[$AICPA Adapted$]$

Select the correct answer for each of the following questions.

Peel Company received a cash dividend from a common stock investment. Should Peel

report an increase in the investment account if it uses the cost method or equity method of

accounting?

In $20$X$0,$ Neil Company held the following investments in common stock:

$25,000$ shares of B&K Inc.$\text{'}$s $100,000$ outstanding shares. Neil's level of ownership gives it

the ability to exercise significant influence over the financial and operating policies of $B$&$K.$

$6,000$ shares of Amal Corporation's $309,000$ outstanding shares.

During $20$X$0,$ Neil received the following distributions from its common stock investments:

What amount of dividend revenue should Neil report for $20$X$0?$

a$.$ $$1,500.$

b$.$ $$4,200.$

c$.$ $$31,500.$

d$.$ $$34,200.$