An entity has 20% investment in ordinary shares and 25% investment in preference shares over the investee. Which of the following is true?

a. Only the cash dividend received related to 20% is treated as dividend income

b. Only the cash dividend received related to 25% is treated as dividend income

c. Cash dividend received for both investments should be treated as dividend income

d. Cash dividend received for both investments should be treated as a deduction from

investment

If an associate has preference share, the proper way of computing the share in net income of an associate for the current year assuming the preference share is cumulative would be

a. Deduct the preference dividend for the current year only, whether declared or not

b. Deduct the preference dividend for the current year, if declared only

c. Deduct the preference dividend for the current year including any previous undeclared

preference dividend

d. Deduct both the preference and ordinary dividend for the current year only, whether

declared or not