Question
Alexa & Co. holds 40% of the total common shares outstanding of Olivia LLC. During the current year, Olivia LLC declares and pays a $100,000
Alexa & Co. holds 40% of the total common shares outstanding of Olivia LLC. During the current year, Olivia LLC declares and pays a $100,000 cash dividend on its common shares and reports net income of $500,000. What effect will Olivia LLC's earnings and dividend have on Alexa & Co's financial statements? Note that Alexa & Co has not elected the fair value option for this investment.
a) Increases $40,000 , Increases $160,000 , Increases $160,000
b) Increases $100,000 , Increases $240,000 , Increases $100,000
c) Increases $240,000 , Increases $200,000 , Increases $240,000
d) Increases $40,000 , Increases $160,000 , Increases $200,000
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