Oriole Company owns 14000 of the 50000 outstanding shares of Taylor, Inc. common stock. During 2018,...
Oriole Company owns 14000 of the 50000 outstanding shares of
Taylor, Inc. common stock. During 2018, Taylor earns $1020000 and
pays cash dividends of $825000.
Oriole should report investment revenue for 2018 of
| $231000. |
| $54600. |
| $0. |
| $285600. |
Homework Answers
Correct answer--------------$0
.
The holding % of the company is more than 20% that means equity method of recording investment will be used.
In equity method the investee company increases the investment account with its share of income in investment company and reduces dividend received from investment account.
In above case the Oriole company will not report any income in its income statement with respect to investment in Taylor inc.
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