Reference no: EM132693347
Problem 1: How does an investor report dividends received from an investment accounted for as a joint venture?
A. As investment income on its income statement.
As a liquidation of the investment.
C. As a noncontrolling interest.
D. As part of other comprehensive income.
Problem 2: The B&B Company acquired a 25% interest in SS Enterprises for $8,000,000 and appropriately applied the equity method. During the first year, SS reported net income of $1,000,000 and paid cash dividends totaling $100,000.
What amount will B&B Company report regarding its SS Enterprises investment at the end of the first year on its Income Statement?
A. Investment earnings totaling $250,000
B. Investment earnings totaling $265,000
C. Net investment earnings totaling $225,000
D. Dividend income totaling $25,000