An entity has 20% investment in ordinary shares and 25% investment in preference shares over the investee. Which of the following is true? a. Only the cash dividend received related to 20% is treated as dividend income b. Only the cash dividend received related to 25% is treated as dividend income c. Cash dividend received for both investments should be treated as dividend income d. Cash dividend received for both investments should be treated as a deduction from investment
An entity has 20% investment in ordinary shares and 25% investment in preference shares over the investee. Which of the following is true? a. Only the cash dividend received related to 20% is treated as dividend income b. Only the cash dividend received related to 25% is treated as dividend income c. Cash dividend received for both investments should be treated as dividend income d. Cash dividend received for both investments should be treated as a deduction from investment
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Please answer with reason for all why the option is correct and why the other options are incorrect
Question 1
An entity has 20% investment in ordinary shares and 25% investment in
a. Only the cash dividend received related to 20% is treated as dividend income
b. Only the cash dividend received related to 25% is treated as dividend income
c. Cash dividend received for both investments should be treated as dividend income
d. Cash dividend received for both investments should be treated as a deduction from
investment
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