Under the equity method of accounting,the investor will:

Question

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Under the equity method of accounting, the investor reduces the investment account for dividends received from the investee and increases the investment account to reflect the investor's share of income from the investee. This method is used when the investor has significant influence over the investee but does not have control over its operations. Thus, the investor records its share of the investee's income as an increase in its investment account, and dividends paid by the investee reduce the investment account. Option C correctly reflects this treatment.

Under the Equity Method of Accounting,the Investor Will