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Exercise 17-13 Parent Co. invested $1,000,000 in Sub Co. for 25% of its outstanding stock. Sub Co. pays out 40% of net income

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a) Net income = 110000

b) Total net income = 110000*100/25 = 440000

c) Total dividend = 440000*40% = 176000

d) Dividends = 176000*25% = 44000

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