How are dividends paid by a parent company

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Question 1: How are dividends paid by a parent company to its subsidiary company presented on the consolidated statement of cash flows?

a. Under operating activities
b. Under financing activities
c. Under investing activities
d. They are not presented, as there is no cash flow effect.

Question 2: JT Ltd. acquired an additional block of shares in its associate company. This additional acquisition gives JT significant influence. As a result, JT switched to the equity method for reporting purposes. A loss resulted from the revaluation and should be

a. deferred until the investment is sold.
b. reported in net income.
c. reported in other comprehensive income.
d. adjusted through retained earnings.

Reference no: EM132559491

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