Question: Gorham Enterprises declared and distributed a cash dividend in Year 1 . How will the receipt of those dividends affect the investment account of the

Gorham Enterprises declared and distributed a cash dividend in Year 1. How will the receipt of those dividends affect the investment account of the investor who uses the fair value method vs. the equity method?
Select answer from the options below
The investment account will be decreased using the fair value method but will not change using the equity method.
The investment account will be decreased using the equity method but will not change using the fair value method.
The investment account will be decreased using the equity method but will be increased using the fair value method.
The investment account will not change with either the fair value method or the equity method.

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock 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 Accounting Questions!

Q:

The assets, liabilities, and equities of Rapid Design Studio have the following balances at December 31, 2025. The Retained Earnings was $33,300 at the beginning of the year. At year end, Common...

Q:

Dellinger Company declared and distributed a cash dividend out of their current earnings. How will the receipt of those dividends affect the investment account of the investor who uses the fair value...

Q:

I've attached the question as a word file, thanks! JWCL165_c12_568-611.qxd 8/12/09 8:29 AM Page 568 12 Investments Chapter STUDY OBJECTIVES After studying this chapter, you should be able to: 1...

Q:

NEED ANSWER BEFORE 11:00 IF NOT LET ME KNOWTODAY OCTOBER FIRST, THEY ASK ME FOR MORE MONEY BUT DO NOT KNOW HOW TO ADD MORE Text 1 450 A business combination is accounted for properly as an...

Q:

I need E4-7 and E4-11 Completed and I need P5-4B completed...... Please give briefing on how you got answers c04BExercises.qxd 12/7/12 9:53 AM Page 1 B EXERCISES 2 E4-1B (Computation of Net Income)...

Q:

I got screwed over by a tutor who took my question but when it was due told me he couldn't do it. It was due today but i am going to try to get some credit. I need 6 exercises/problems done. I need...

Q:

1.PAS 28 generally applies when the level of ownership over another company is at what percentage? a.Less than 20% b.20%-30% c.20%-50% d.More than 50% 2.When an investor uses fair value accounting to...

Q:

Can you please help with the following ive been in the hospital and have gotten behind Brief Exercise 116 On April 1, 2018, West Company purchased $422,000 of 6.75% bonds for $438,630 plus accrued...

Q:

1.PAS 28 generally applies when the level of ownership over another company is at what percentage? a.Less than 20% b.20%-30% c.20%-50% d.More than 50% 2.When an investor uses fair value accounting to...

Q:

I need answers for all the questions on this practice final exam. I've attached the file. David A. Dittman, Financial Accounting Question Sheet HA 121 Final Exam Name:...

Q:

Use the following information to answer questions 1 and 2. Riley's Corporation was organized on January 1, 2019. The firm was authorized to issue 100,000 shares of $5 par value common stock. During...

Q:

2. Zinc blend and wurtzite are the two important structures for semiconductors. Use ZnS as an example. a) Identify which crystal system they belong to respectively. b) Write the fractional...

Q:

Describe some of the primary differences among hammers, mechanical presses, and hydraulic presses.

Q:

The number of sexual harassment cases that have clear merit is about Multiple Choice 4 5 % . 3 0 % 1 5 % . 6 0 % .

Q:

Please I want explain for this topic in details Q)explain the discounted cash flow