Nantucket Company owns a 30% interest in the stock of Franklin Corporation. During the year, Nantucket debited the Investment account for $22,500 and credited the account for $15,000. Based on this information, Franklin must have paid dividends of:

Question

Quizplus · Accepted Answer

Nantucket credited the Investment account for $15,000, which represents its share of dividends received from Franklin. Since Nantucket owns 30% of Franklin, the total dividends paid by Franklin would be $15,000 / 0.30 = $50,000.

Nantucket Company Owns a 30% Interest in the Stock of Franklin