[arek28]

Pardon my ignorance on this matter… i read in the previous posts that the dividend should be ignored to avoid double counting the income…

So what you’re saying is that the dividend income recognized by the parent company should be posted as “Investment Income” in the P&L Statement? How can we avoid the double counting?

[arek28]

Yes Mike, thank you for your clear explanation…

[arek28]

Pardon my ignorance on this matter… i read in the previous posts that the dividend should be ignored to avoid double counting the income…

So what you’re saying is that the dividend income recognized by the parent company should be posted as “Investment Income” in the P&L Statement? How can we avoid the double counting?

[arek28]

@mikelittle said:
In subsidiary records, Dr Retained Earnings Cr Dividend Payable

In parent records, Dr Dividend Receivable Cr Investment Income

In subsidiary records, Dr Dividend Payable Cr Cash

In parent records, Dr Cash Cr Dividend Receivable

Ok?

Hello Mike,

Thank you for your fast reply.

Could you please explain more about the “Investment Income” account? Where is this account located in the Balance sheet?

[arek28]

Hi Mike,

Sorry i’m still confused.

Could you please assist to show the entries in both parent/subsidiary when:
– Subsidiary declares dividend payable to Parent
– Subsidiary pays cash dividend to Parent

thank you in advance

[Author]

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