Ocean Corporation owns 30% of Woods Corp.for which they paid $5.5 million and uses the equity method to account for the investment.Woods Corp.paid a $100,000 dividend; the investment in Woods Corp.account will decrease by $30,000,which is Ocean's proportionate share of the dividend.

Question

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Dividend receipts result in a decrease in the investment account when the equity method is used.

Ocean Corporation Owns 30% of Woods Corp