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Economics

Consider the following facts:

- Company A owns 30% of Company B.

- During 2015, Company B reported earnings of $650,000.

- During 2015, Company B paid dividends of $345,000.

With respect to Company A's Investment in Company B account and its net income, which of the following is true?

Company A's Investment in Company B account will increase by $91,500 and its net income will increase by $195,000.

Company A's Investment in Company B account will not change and its net income will increase by $103,500.

Company A's Investment in Company B account will increase by $91,500 and its net income will increase by $103,500.

Company A's Investment in Company B account will increase by $195,000 and its net income will increase by $103,500.

None of these answers are correct.

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Business Economics, Economics

Category:- Business Economics
Reference No.:- M91696829

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