Smith Company elected to use the cumulative earnings approach for distributions from its equity-method investment purchased at the beginning of 20X1. During 20X1, Smith earned $244,000 on the investment and received $110,000 in dividends. In its statement of cash flowsdirect method, Smith should report the dividends as a(n):

Multiple Choice

• investing activity.

• operating activity.

• noncash investing and financing activity.

• financing activity.