_____ On 5/1/06, Pyne Inc. formed Syne Inc., investing $500,000 cash. For 2006, Syne reported net income of $65,000 and declared and paid cash dividends of $25,000. Under the cost method, what amount appears in the parent's separate 2006 income statement-not the consolidated income statement?

Question

Quizplus · Accepted Answer

Under the cost method, the parent company's income statement only recognizes dividend income from the subsidiary. Therefore, Pyne Inc. would report $25,000, the amount of dividends received from Syne Inc., in its separate 2006 income statement.

_____ on 5/1/06, Pyne Inc