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Turner company owns 15% of the outstanding stock of ica company. during the current year, ica paid a $5.50 million cash dividend on its common shares.
What effect did this divident have on Turner's 2021 financial statements? (Enter your answers in whole dollars, not in millions, Amounts to be deducted should be indicated with a minus sign)
Balance sheet Income statement



Answer :

Turner Corporation:

The impact of this dividend on Turner's financial statements for 2021 is as follows:

Account Statement

Cash $550,000

$550,000 in retained earnings

Revenue Statement

$550,000 in dividend income

a) Information and computations

15% ownership in ICA Company's shares

ICA distributed a cash dividend of $5.50 million.

Turner will receive $550,000 ($5,500,000 * 15%) as his dividend part.

b) Turner will receive the cash dividend, which will add $550,000 to its cash balance. Additionally, it will raise dividend revenue by $550,000, boosting the annual profit.

Turner will also raise Retained Earnings by the same amount if dividend are not paid.

Financial statements:

Financial statements may be thought of as written records of a company's business operations and financial performance.

Knowing the company's costs as well as its profit and loss is useful.

Learn more about Balance sheet Income statement:

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