How are dividends received from inkblot reflected in trycker

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Question

On January 4, 2017, Trycker, Inc. acquired 40% of the outstanding common stock of Inkblot Co. for $2,400,000. This investment gave Trycker the ability to exercise significant influence over Inkblot. Inkblot's assets on that date were recorded at $8,000,000 with liabilities of $2,000,000. There were no other differences between book and fair values.

During 2017, Inkblot reported net income of $500,000 and paid dividends of $300,000. The fair value of Inkblot at December 31, 2017 is $7,000,000. Trycker elects the fair value option for its investment in Inkblot.

How are dividends received from Inkblot reflected in Trycker's accounting records for 2017?

Reference no: EM132354492

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