Parent Co. invested $1,000,000 in Sub Co. for 25% of its outstanding stock. Sub Co. pays out 40% of net income in dividends each year.
Instructions
Use the information in the following T-account for the investment in Sub to answer the following questions.

(a) How much was Parent Co.€™s share of Sub Co.€™s net income for the year?
(b) How much was Parent Co.€™s share of Sub Co.€™s dividends for the year?
(c) What was Sub Co.€™s total net income for the year?
(d) What was Sub Co.€™s total dividends for theyear?

Transcribed Image Text:

Investment in Sub Co. 1,000,000 110,000 44,000