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An Investor Uses the Cost Method of Accounting for Its

Question 7

Multiple Choice

An investor uses the cost method of accounting for its investment in common stock.During the current year,the investor received $25,000 in dividends,an amount that exceeded the investor's share of the investee company's undistributed income since the investment was acquired.The investor should report dividend income of what amount?


A) $25,000
B) $25,000 less the amount in excess of its share of undistributed income since the investment was acquired
C) $25,000 less the amount that is not in excess of its share of undistributed income since the investment was acquired
D) None of the above is correct.

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