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Bhavya Oberoi
on Oct 16, 2024

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Jarrett Corporation uses the equity method to account for its 25% investment in Polo Corporation and receives $15,000 in dividends. How should Jarrett account for these dividends?

A) An increase in assets
B) A decrease in the investment
C) An increase in income
D) A decrease in income

Equity Method

An accounting approach for recording investments in other entities, where the investment's value is adjusted based on the investor's share of the investee's profits or losses.

Dividends

Payments made by a corporation to its shareholder members, distributed from the company's profits.

Investment

The allocation of resources, usually financial, in expectation of a future return.

  • Explain the impact of dividends on investment portfolios.
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JM
Jason McLaughlinOct 23, 2024
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