Question - Headland Co. invested $1,060,000 in Sage Co. for 25% of its outstanding stock. Sage Co. pays out 40% of net income in dividends each year.
Use the information in the following T-account for the investment in Sage to answer the following questions.
Investment in Sage Co. 1,060,000 105,000 42,000
(a) How much was Headland Co.'s share of Sage Co.'s net income for the year?
(b) What was Sage Co.'s total net income for the year?
(c) What was Sage Co.'s total dividends for the year?
(d) How much was Headland Co.'s share of Sage Co.'s dividends for the year?