How does investor report dividends received from investment

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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

Reference no: EM132693347

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