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brown corporation earns 720000 and pays cash dividends of 240000 during 2021. Dexter corporation owns 3000 of the 10000 outstanding shares of brown how much investment income should dexter report

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abiolataiwo2015

If Dexter corporation owns 3000 of the 10000 outstanding shares of brown the amount of investment income should dexter report is :$1,104,000.

Investment income

Using this formula

Investment income=Beginning balance+(Earning×Outstanding shares percentage)-(Cash dividend×Outstanding shares percentage)

Let plug in the formula

Investment income=$960,000 + ($720,000 ×3,000/10,000) - ($240,000 × 3000/10000)

Investment income=$960,000 + ($720,000 × .3) - ($240,000 × .3)

Investment income=$1,104,000

Inconclusion the amount of investment income should dexter report is :$1,104,000.

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