Multiple Choice
On January 1, 20X8, William Company acquired 30 percent of eGate Company's common stock, at underlying book value of $100,000. eGate has 100,000 shares of $2 par value, 5 percent cumulative preferred stock outstanding. No dividends are in arrears. eGate reported net income of $150,000 for 20X8 and paid total dividends of $72,000. William uses the equity method to account for this investment.
-Based on the preceding information,what amount would William Company receive as dividends from eGate for the year?
A) $62,000
B) $21,600
C) $18,600
D) $54,000
Correct Answer:
Verified
Correct Answer:
Verified
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