I have a quick question. Is the return on capital (that represent dividend received from the investment, ie. the $60 in the example at 5:18) recorded as an asset on the balance sheet? Or is it recorded as an earning on the income statement?
$60 is a deduction (credit) to the investment in associate account and debit to either cash or dividend receivable account in the book of the investor.
I have a quick question. Is the return on capital (that represent dividend received from the investment, ie. the $60 in the example at 5:18) recorded as an asset on the balance sheet? Or is it recorded as an earning on the income statement?
$60 is a deduction (credit) to the investment in associate account and debit to either cash or dividend receivable account in the book of the investor.
Thanks for the detailed explanation of the topic. I was asked this question recently in an interview i could not answer it properly.
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Thank you! Cheers!