GNR Inc. owns 100% of NMX Inc. During the year, NMX Inc. earned a net income of $40,000 and paid Dividends of $10,000. Assuming once again that GNR owned 80% of NXR instead of 100%, what would be the effect on GNR's investment in NMX account under the cost method if GNR received $9,000 in dividends from NMX?
A) An increase of $23,000.
B) An increase of $1,000
C) No effect.
D) A decrease of $1,000.
Correct Answer:
Verified
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