A corporation that uses the equity method of accounting for its investment in a 40%-owned investee that camed 520,000 and paid 55,000 in dividends)made the following entries Question 24 Not yet wered Points out of 3.00 Flag question Investment income 58.000 Investment in investee 18.000 Cash 52.000 Dividend Revenue $2,000 What effect will these entries have on the investor's statement of financial position! Select one a Investment fairly stated, retained earnings overstated Ob Investment understated, retained earnings understated C. Investment overstated, retained earnings overstated d. Investment overstated, retained earnings understated O e All accounts will be fairly stated Questo 25 Not yet and Points out of 100 On 1/1/21, Vitale Co. invested $1.000.000 in Demo Co. for 20% of its outstanding stock. The equity method of accounting is appropriate. Demo Co. pays out of net income individends each year. Vitale received $21,000 in Demo dividends during 2021. What was Demo's 2021 Net Income? Pragutin Select one O a. $500,000 b. $125,000 O c. $87.500 O d. 5156,250 O e. $350,000