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Group Chp1 1-8, 10, 12 - 1 LO3 p 28 When an investor uses...

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1. LO3 p. 28 When an investor uses the equity method to account for investments in common stock, cash dividends received by the investor from the investee should be recorded as a. A deduction from the investor's share of the investee's profits. b. Dividend income. c. A deduction from the stockholders' equity account, dividends to stockholders. d. A deduction from the investment account. Pg 7,8 (AICPA adapted) 2. LO2 Which of the following does not indicate an investor company's ability to significantly influence an investee? 3. LO3 Sisk Company has owned 10 percent of Maust, Inc., for the past several years. This ownership did not allow Sisk to have significant influence over Maust. Recently, Sisk acquired an additional 30 percent of Maust and now will use the equity method. How will the investor report this change?
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