Multiple Choice
On 1 January 2016,Yu Ltd acquired 100 000 shares (30 per cent of the voting interest) in Ping Ltd for $900 000 cash.On 30 June 2016,Ping Ltd announced its earnings per share for the first six months of 2016 at $2.00 per share.On 20 November,Ping Ltd paid dividends to shareholders at $1.20 per share.On 31 December 2016,Ping Ltd announced its earnings per share for 2016 at $3.50 per share (i.e. ,$1.50 additional since 30 June) .
-If Yu Ltd used the cost method,what would have been the impact of Ping Ltd's 30 June 2016 earnings announcement?
A) Dividend revenue would have increased by $200 000.
B) Investment in Ping Ltd would have increased by $200 000.
C) Investment in Ping Ltd would have decreased by $200 000.
D) No record would have been made.
Correct Answer:
Verified
Correct Answer:
Verified
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