Mallard Ltd

Mallard Ltd. acquired 75% of the outstanding common shares of Teal Ltd. at December 31, 20X1, for $900,000. Mallard has recorded its investment using the cost method.
- In 2008, Teal paid out dividends of $100,000. In preparing Mallard's consolidated financial statements, what elimination is required for the dividends?

A) Reduce dividends declared by $75,000; reduce dividend income by $75,000.
B) Reduce dividends declared by $100,000; reduce dividend income by $100,000.
C) Reduce dividends declared by $100,000; reduce dividend income by $75,000; reduce non-controlling interest by $25,000.
D) Reduce dividend declared by $100,000; reduce dividend income by $75,000; increase non-controlling interest by $25,000.