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LenKa [72]
3 years ago
6

An investor company uses the equity method to account for its investment in 25% of the outstanding common stock of an investee c

ompany. How should cash dividends received from the investee affect the financial statements of the investor
Select one:
a. A decrease in the Equity Investment account
b. A decrease in retained earnings
c. An increase in the Equity Investment account
d. Dividend income
Business
1 answer:
masya89 [10]3 years ago
4 0

Answer:

Option A is correct.

<u>A decrease in the Equity Investment account</u>

Explanation:

Dividend received amount decreases the investment account. Net income interest in investee account is added to the investment account.

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