Question: Under the equity method, dividends received by the investor from the investee will decrease the investments carrying amount. That is, we credit Equity investments. Why

Under the equity method, dividends received by the investor from the investee will decrease the investments carrying amount. That is, we credit "Equity investments." Why don't we credit "Dividend Revenue?"

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!

A twelve year 5,000 par valued floating rate bond with annual coupons has a price P such that the investor's APY is 8%. The annual coupon rate for the n-th year is given by the function 07+.0035*n a....

Under the equity method, dividends received by the investor from the investee will decrease the investments carrying amount, that is, we credit "equity investments." Why don't we credit dividend...

Answer True and False 1 . Equity security holdings between 2 0 and SO percent indicates that the investor has a controlling interest over the investee. 2 . Significa nt influence over an investee may...

Under the equity method, dividends received by the investor should be recorded as a. a reduction in the carrying value of the investment b. an addition to the carrying value of the investment 20. c....

44. Alfred issued 9%, 10-year bonds dated January 1, 2010, with a face value of $100,000 at 102 plus accrued interest on March 1, 2010. Alfred amortizes premiums and discounts using the straight-line...

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...

1. Which of the following describes an operating segment? STATEMENT I. A component of an entity that engages in business activities from which it may earn revenues and incur expenses. STATEMENT II. A...

TRUE OR FALSE / MULTIPLE CHOICE 1. The IASB requires that investments meeting the business model (held-for-collection) and contractual cash flow tests be valued at fair value. 2. The IASB requires...

5. A requirement for a security to be classified as held-to-maturity is a.ability to hold the security to maturity. b.positive intent. c.the security must be a debt security. d.All of these are...

The lower-of-cost-or-market method is inherently inconsistent. Do you agree? Explain.

Identify the cutting speed end mill. Table 4-2. Recommended Cutting Speeds and Feeds Turning Workpiece Material Aluminum Brass Copper Iron, cast (medium) Magnesium Steel Cold rolled Low carbon...

Which of the following statements is CORRECT? a . Corporations of all types are subject to the corporate income tax. 5 . 6 . 7 . 8 .

1. Assume you are editing the main.cpp file. Write a vim command to add the contents of the main.h file to the beginning of the main.cpp file. Do not assume you know the contents of the main.h file....