Equity Investments 1) Under the cost method, how are dividends received treated/ accounted for.?

Question

Question

Equity Investments 1) Under the cost method, how are dividends received treated/ accounted for.?

Equity Investments

1) Under the cost method, how are dividends received treated/ accounted for.?

business accounting

Add a comment Improve this question Transcribed image text

Answer 1

Answer #1

Answer

Under the cost method dividend received is treated as revenue and it does not affect the carrying balance of that investment. When any dividend is received it is debited to the cash account and credited to the revenue account.

Add a comment

Answer 2

Similar Homework Help Questions

Significant influence equity investments must be accounted for using the equity method. True False

Significant influence equity investments must be accounted for using the equity method. True False
Under the equity method, the investor a) debits the Revenue from Investments when the investee reports...

Under the equity method, the investor a) debits the Revenue from Investments when the investee reports income U b) must debit the Equity Investments account when a dividend is received c) must record its share of the investee's net income o d) must use the LIFO method for tax purposes
Tuue ul lhe investment account reduced under equity-method reporting? What is a differential? How is a...

Tuue ul lhe investment account reduced under equity-method reporting? What is a differential? How is a differential treated by an investor in computing income from an investee under (a) cost-method and (b) equity-method reporting? Turner M U4-2 LO 4-1 Q4-3

Ford Motor Company’s 2011 financial statements revealed that it has extensive equity method investments. In total,...

Ford Motor Company’s 2011 financial statements revealed that it has extensive equity method investments. In total, the balance sheet showed equity investments of $2,569 million at December 31, 2010, and $2,936 million at December 31, 2011. During 2011 Ford included equity income of $500 million in its income statement, and footnote 11 indicates that approximately $316 million in dividends was received from equity investees. Compute the approximate change in Ford’s equity investment asset that cannot be explained by either increases...
1. How are bad debts accounted for under the direct write-off method? What are the disadvantages...

1. How are bad debts accounted for under the direct write-off method? What are the disadvantages of this method? 2. Define the six principles of control activities and give an example of each. An example may include how to prevent fraud or a type of fraud that could occur if these activities are not in place.
1.In chapter two, we discuss different types of investments and how they are accounted for on...

1.In chapter two, we discuss different types of investments and how they are accounted for on the financial statements. In 200 words or more, discuss some of the issues that affect equity investments. In particular, discuss how “investor control” is a concept relating to the accounting for investments. 2. In chapter one, our topical coverage discusses new rules for consolidating financial statements. In 200 words or more, discuss issues that pertain to consolidations from an asset or liability valuation standpoint....

In a stock acquisition accounted for by the equity method, a portion of the purchase price...

In a stock acquisition accounted for by the equity method, a portion of the purchase price often is attributed to goodwill or to specific assets or liabilities. how are these amounts determined at aquisition? how are these amounts accounted for in subsequent periods?
When using the equity method to account for an investment, cash dividends received by the investor...

When using the equity method to account for an investment, cash dividends received by the investor from the investee should be recorded: Multiple Choice As a reduction in the investment account. As an increase in the investment account. As dividend income. As a contra item to stockholders' equity.
What is the rationale for used the Equity Method for accounting for Investments in the Common...

What is the rationale for used the Equity Method for accounting for Investments in the Common Stock of another Corporation? Describe the accounting for Investments in Common Stock under the Equity Method.

c. How does the partial equity method differ from the equity method? a. Under the partial...

c. How does the partial equity method differ from the equity method? a. Under the partial equity method, the balance in the investment account is not decreased by amortization on allocations made in the acquisition of the subsidiary b. In the total assets reported on the consolidated balance sheet In the treatment of dividends d. In the total liabilities reported on the consolidated balance sheet In a business combination when the fair value of the assets and liabilities assumed exceed...

Equity Investments 1) Under the cost method, how are dividends received treated/ accounted for.?

Homework Answers

Add Answer to:
Equity Investments 1) Under the cost method, how are dividends received treated/ accounted for.?

Post as a guest

Earn Coins

Significant influence equity investments must be accounted for using the equity method. True False

Under the equity method, the investor a) debits the Revenue from Investments when the investee reports...

Tuue ul lhe investment account reduced under equity-method reporting? What is a differential? How is a...

Ford Motor Company’s 2011 financial statements revealed that it has extensive equity method investments. In total,...

1. How are bad debts accounted for under the direct write-off method? What are the disadvantages...

1.In chapter two, we discuss different types of investments and how they are accounted for on...

In a stock acquisition accounted for by the equity method, a portion of the purchase price...

When using the equity method to account for an investment, cash dividends received by the investor...

What is the rationale for used the Equity Method for accounting for Investments in the Common...

c. How does the partial equity method differ from the equity method? a. Under the partial...

Equity Investments 1) Under the cost method, how are dividends received treated/ accounted for.?

Homework Answers

Add Answer to: Equity Investments 1) Under the cost method, how are dividends received treated/ accounted for.?

Post as a guest

Earn Coins

Add Answer to:
Equity Investments 1) Under the cost method, how are dividends received treated/ accounted for.?