Question

Zwick Company bought 25,500 shares of the voting common stock of Handy Corporation in January 2021. In December, Handy announced $202,700 net income for 2021 and declared and paid a cash dividend of $3.00 per share on all 202,500 shares of its outstanding common stock. Zwick Company's dividend revenue from Handy Corporation in December 2021 would be:

Answer 1

Answer:

$76,500

Explanation:

Zwick Company owns 25,500 shares of Handy Corporation, which represents 25,500 / 202,500 = 12.59% of all common stocks. Since Zwick influence over Handy is not significant, all dividends received will be directly considered dividend revenue.

total dividends received = $3 per share x 25,500 shares = $76,500