Investor Inc. owns 40 percent of Ailmand Corporation. During the calendar year, Ailmand had net earnings of $100,000 and paid cash dividends of $10,000. Investor mistakenly recorded these transactions using the cost method rather than the equity method of accounting. What effect would this have on the investment account, net earnings, and retained earnings, respectively?

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The Answer of Investor Inc. owns 40 percent of Ailmand Corporation. During the calendar year, Ailmand had net earnings of $100,000 and paid cash dividends of $10,000. Investor mistakenly recorded these transactions using the cost method rather than the equity method of accounting. What effect would this have on the investment account, net earnings, and retained earnings, respectively?