Question

For 2018, Bentley Inc. reported Investment revenue of $10 million. The investment revenue includes Bentley Inc’s...

For 2018, Bentley Inc. reported Investment revenue of $10 million. The investment revenue includes Bentley Inc’s $4 million share of the net income of Big Dawg Inc. Bentley Inc. records its investments in Big Dawg Inc using the equity method. In its balance sheet, Bentley Inc. reports,

Long term investment 12/31/17 at $41mil and 12/31/2018 at $45mil.

How much cash was received from the investment revenue in 2018?

$14

$6

$10

$4

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Answer #1

Cash received from the investment revenue in 2018 = reported investment revenue - net income from Big Dawg inc.

Cash received from the investment revenue = $10 million - $4 million = $6 million

Explanation:

Bentley inc. incorporation records it's investment in Big Dawg inc. using equity method. So, net income received from Big Dawg will not be considered has cash.

The amount of net income received from Big Dawg inc. is considered Long term investment.

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