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An entity owed 100% of another's entity's preference shares and 20% of ordinary shares. The investee's share capital outstanding on December 31, 2019 included 5,000,000 of 10% cumulative preference shares and 10,000,000 of ordinary shares. The investee reported net income of 8,000,000 for 2019. No dividend was declared for both preference and ordinary shares in 2019. What amount should be reported as investment income for 2019? a.      1,600,000 b.     1,500,000 c.      2,000,000 d.     1,000,000

An entity owed 100% of another's entity's preference shares and 20% of ordinary shares. The investee's share capital outstanding on December 31, 2019 included 5,000,000 of 10% cumulative preference shares and 10,000,000 of ordinary shares. The investee reported net income of 8,000,000 for 2019. No dividend was declared for both preference and ordinary shares in 2019. What amount should be reported as investment income for 2019? a.      1,600,000 b.     1,500,000 c.      2,000,000 d.     1,000,000

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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An entity owed 100% of another's entity's preference shares and 20% of ordinary shares. The investee's share capital outstanding on December 31, 2019 included 5,000,000 of 10% cumulative preference shares and 10,000,000 of ordinary shares.

The investee reported net income of 8,000,000 for 2019. No dividend was declared for both preference and ordinary shares in 2019.

What amount should be reported as investment income for 2019?

a.      1,600,000

b.     1,500,000

c.      2,000,000

d.     1,000,000

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