Milton Company owns 30% interest in the stock of Darcy Corporation.During the year,Darcy pays $20,000 in dividends to Milton,and reports $100,000 in net income.Milton Company will report Equity-Method Investment Revenue of:

Question

Quizplus · Accepted Answer

Equity-Method Investment Revenue is calculated by multiplying the percentage of ownership with net income. 
In this case, Milton Company owns 30% of Darcy Corporation and Darcy reported a net income of $100,000. 
So, Equity-Method Investment Revenue = 30% x $100,000 = $30,000. 
In addition, dividends received do not affect the calculation of equity-method investment revenue, so the $20,000 dividend payment is not included. Therefore, the correct answer is C.

Milton Company Owns 30% Interest in the Stock of Darcy