An investor in common stock received dividends in excess of the investors share of investees subsequent to

Question:

An investor in common stock received dividends in excess of the investor’s share of investee’s subsequent to the date of the investment. How will the investor’s investment account be affected by those dividends under each of the following accounting methods?

Cost method Equity method

a. No effect ........No effect

b. Decrease ........No effect

c. No effect ........Decrease

d. Decrease ........Decrease

Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on...