David Company owns 30% of Ralph Company.During 2010, Ralph reported earnings of $500, 000 and paid cash dividends of 320, 000.What effect would this have on David's investment account and net income? $\begin{array}{rrr}
&\text {Investment Account}&\text {Net Income}\
\text { I. } & +\$ 150,000 & +\$ 96,000 \
\text { II. } & --- & +\$ 96,000 \
\text { III. } & +\$ 54,000 & +\$ 96,000 \
\text { IV. } & +\$ 54,000 & +\$ 150,000
\end{array}$

Question

David Company owns 30% of Ralph Company.During 2010, Ralph reported earnings of $500, 000 and paid cash dividends of 320, 000.What effect would this have on David's investment account and net income? $\begin{array}{rrr}
&\text {Investment Account}&\text {Net Income}\ 
\text { I. } & +\$ 150,000 & +\$ 96,000 \
\text { II. } & --- & +\$ 96,000 \
\text { III. } & +\$ 54,000 & +\$ 96,000 \
\text { IV. } & +\$ 54,000 & +\$ 150,000
\end{array}$

Quizplus · Accepted Answer

The Answer of David Company owns 30% of Ralph Company.During 2010, Ralph reported earnings of $500, 000 and paid cash dividends of 320, 000.What effect would this have on David's investment account and net income? $\begin{array}{rrr}
&\text {Investment Account}&\text {Net Income}\ 
\text { I. } & +\$ 150,000 & +\$ 96,000 \
\text { II. } & --- & +\$ 96,000 \
\text { III. } & +\$ 54,000 & +\$ 96,000 \
\text { IV. } & +\$ 54,000 & +\$ 150,000
\end{array}$

David Company Owns 30% of Ralph Company A)I B)II C)III D)IV

David Company Owns 30% of Ralph Company A)I
B)II
C)III
D)IV