ings Company earns $170,000 and pays total dividends of $60,000 to its sharehold

Question

ings Company earns $170,000 and pays total dividends of $60,000 to its shareholders. as a result of Sawdlings' activity? What would be the change in the account itled Investment in Equity of Sawdlings Company equal to $This would Suppose Mason Company owns 40% of Sawdings Company. Sa Requirement What appears on the income statement of Mason Company as a result of Sawdlings' activity? Wha Affiliates on Mason's balance sheet? method and claim the Mason Company would use the investment account. When Mason receives dividends, the investment accoun The net change in the investment account would be an increase of s by the $received.

Explanation / Answer

Mason company would use the accrual method and claim 40% of sawdlings company equal to $24,000. This would increase the investment account. When Mason receives dividend, the investment account is increased by the $24,000 received.

The net change in the investment account would be an increase of $24,000.

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