Use the information below to answer the following questions:
On 1 January 2012, Yu Ltd acquired 100 000 shares (30% of the voting interest) in Ping Ltd for $900 000 cash. On 30 June 2012, Ping Ltd announced its earnings per share for the first 6 months of 2012 at $2.00 per share. On 20 November, Ping Ltd paid dividends to shareholders at $1.20 per share. On 31 December 2012, Ping Ltd announced its earnings per share for 2008 at $3.50 per share (i.e., $1.50 additional since 30 June).
-If Yu Ltd used the cost method,what dividend revenue would it record for the year ended 31 December 2012 in respect of its investment in Ping Ltd?
A) nil
B) $120 000
C) $200 000
D) $350 000.

Question

Quizplus · Accepted Answer

Yu Ltd would record dividend revenue of $120,000, calculated as 100,000 shares multiplied by the dividend per share of $1.20.

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