Mize Company owns 30% interest in the stock of Lyte Corporation. During the year Lyte pays $20000 in dividends to Mize and reports $300000 in net income. Mize Company's investment in Lyte will increase Mizes net income by

A) $6000.
B) $90000.
C) $96000.
D) $10000.

Question

Kimberly Crymes · Accepted Answer

Final Answer : B, Explanation :  Mize Company's net income will increase by $90,000, which is 30% of Lyte Corporation's $300,000 net income. Dividends received do not affect net income but are considered a return on investment.

Mize Company owns 30% interest in the stock of Lyte Corporation. During the year Lyte pays $20000 in dividends to Mize and reports $300000 in net income. Mize Company's investment in Lyte will increase Mizes net income by

A) $6000.
B) $90000.
C) $96000.
D) $10000.

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Learning Objectives

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Mize Company owns 30% interest in the stock of Lyte Corporation. During the year Lyte pays $20000 in dividends to Mize and reports $300000 in net income. Mize Company's investment in Lyte will increase Mizes net income byA) $6000.B) $90000.C) $96000.D) $10000.

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Learning Objectives

Learning Objectives

Related questions

Mize Company owns 30% interest in the stock of Lyte Corporation. During the year Lyte pays $20000 in dividends to Mize and reports $300000 in net income. Mize Company's investment in Lyte will increase Mizes net income by

A) $6000.
B) $90000.
C) $96000.
D) $10000.