Pelican Corporation acquired a 25% interest in Seafare Incorporated at book value several years ago.Seafare declared $100,000 dividends in 2013 and reported its income for the year as follows:
Pelican's Investment in Seafare account for 2013 should increase by

Question

Pelican Corporation acquired a 25% interest in Seafare Incorporated at book value several years ago.Seafare declared $100,000 dividends in 2013 and reported its income for the year as follows: 
Pelican's Investment in Seafare account for 2013 should increase by

Quizplus · Accepted Answer

Pelican's investment in Seafare account should increase by the amount of dividends declared, which is $100,000. The income reported by Seafare does not affect the investment account, as Pelican only has a 25% interest and does not have significant influence or control over Seafare.

Pelican Corporation Acquired a 25% Interest in Seafare Incorporated at Book