Pino Corporation owned a 90% interest in a subsidiary, Sino Company, which was accounted for by the equity method, During 2020, Pino had income exclusive of intercompany investment income, of $290,000, Pino share in Sino net income $240,000. Sino declared and paid a $80,000 dividend during Year 2020. There were no differences between the current fair values and carrying amounts of Sinos identifiable net assets on the date of the business combination, and there was no goodwill in the business combination. the consolidated net income of Pino Corporation and subsidiary for 2020 is:

a.

$ 320,000.

b.

$ 530,000.

c.

$ 506,000.

d.

$ 450,000.

ssume that a parent Corporation had appropriately accounted for the December 31, 2020, business combination with its wholly owned subsidiary and that subsidiary had a net income of $80,000 for the year ended December 31, 2021. Assume further that on December 20, 2021, subsidiarys board of directors declared a cash dividend of $0.60 a share on the 50,000 outstanding shares of common stock owned by Parent. Parents journal entry to record the collection of dividends is:

a.

Intercompany dividends payable debit $ 24,000 and cash credit $ 24,000.

b.

Cash debit $ 30,000 and Intercompany dividends receivable credit $ 30,000.

c.

Intercompany dividends receivable debit $ 24,000 and investment in subsidiary credit $ 24,000.

d.

Cash debit $ 30,000 and Intercompany dividends payable credit $ 30,000.