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Dear Mike,
There are several dividend figures mentioned both in the question and the answer. I’d like to test whether my understanding is correct.
My understanding is –
There is altogether 25,000 dividend coming out of Nancy. 15,000 (60%*25,000) is to Orange. This 15,000 is given in two batches – 9,000 (per q SoCI) and 6,000 (per answer W3).
Thank you!
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Dear @Najiya92, would you please have a look at my question? Thank you so much!
Co712 – I’ll look at it! It’s just that I don’t have the material in front of me – but I should have tomorrow!
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Hello Mike,
I did not mean to push, but do you have the material now? Thank you in advance 🙂
Hi, sorry, I lost track of your post! Yes, Nancy has declared a dividend for the year in two parts – an interim dividend of 15,000 and a final dividend of 10,000. Orange share of the interim dividend has been received ( 60% x 15,000 = 9,000 ) and is shown as received investment income in the Orange Statement of Income but the balance receivable of 60% of 10,000 has not yet been received nor accounted for and needs to be.
So far as Orange is concerned, the double entry required to record that receivable dividend is Dr Accounts Receivable and Cr Retained Earnings. But then we need to cancel the RECEIVABLE against 60% of the 10,000 payable in the Nancy Financial Statements
OK?
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