91Ó°ÊÓ

After looking into the T-account of Parent Co.’s it is found that the investment account of Parent Co.’s is increased by $110,000, which means Parent Co.’s share in the net income is $110,000.

The net income of the Sub Co.’s can be calculated by using the Parent Co.’s share in the net income.

$\begin{array}{c}\text{°Õ´Ç³Ù²¹±ô N±ð³Ù I²Ô³¦´Ç³¾±ð= }\frac{\text{±Ê²¹°ù±ð²Ô³Ù C´Ç.'²õ s³ó²¹°ù±ð o´Ú n±ð³Ù i²Ô³¦´Ç³¾±ð}}{\text{±Ê±ð°ù³¦±ð²Ô³Ù²¹²µ±ð s³ó²¹°ù±ð²õ i²Ô S³Ü²ú C´Ç.}}\\ =\frac{\$110,000}{25\%}\\ =\$440,000\end{array}$

Hence, Sub Co.’s total net income is $440,000

As the dividend rate is 40% of net income Parent Co. Share in the dividend is, $44,000

Net dividend paid by the Sub Co’s is,

$\begin{array}{c}\text{°Õ´Ç³Ù²¹±ô D¾±±¹¾±»å±ð²Ô»å=​â¶Ä‰â¶Ä‰}\frac{\text{¶Ù¾±±¹¾±»å±ð²Ô»å â¶Ä‰p²¹¾±»å â¶Ä‰t´Ç â¶Ä‰P²¹°ù±ð²Ô³Ù C´Ç.}}{\text{·¡±ç³Ü¾±³Ù²â p±ð°ù³¦±ð²Ô³Ù²¹²µ±ð â¶Ä‰o´Ú P²¹°ù±ð²Ô³Ù C´Ç.}}\\ =\frac{\$44000}{25\%}\\ =\$176,000\end{array}$

Hence, the total dividend paid is $176,000