What will waterworks to record

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Problem 1: Waterworks owns 40% of the common stock of Baoli Inc. Baoli reported net income of $ 20,000 in 2020 and distributed $ 5000 as dividends. To record this, Waterworks will:

a. Increase cash inflows from investing activities by $ 20,000 and increase cash inflows from financing activities by $ 5000
b. Deduct $ 20000 from net income in the operating activities section and add $ 5000 to the cash inflows from operating activities
c. Increase cash inflows from operating activities by $ 20000 and add $ 5000 to the cash inflows from operating activities
d. Show the $ 20000 in the schedule of non-cash activities and increase cash inflows from investing activities by $ 5000

Reference no: EM132914045

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