Carnation Ltd Purchased a 25% Shareholding in Bloom Ltd on 1

Carnation Ltd purchased a 25% shareholding in Bloom Ltd on 1 January 2021 for $90 000. Bloom Ltd's assets were recorded at fair values and its owners' equity, totalling $350 000, was represented as follows: Share capital $100 000
General reserve $60 000
Asset revaluation surplus $50 000
Retained profits $140 000
During July 2021, Bloom Ltd paid an interim dividend of $15 000. At 31 December 2021, Bloom Ltd reported:
Profit after tax for 2021 $64 000
Final dividend payable $30 000
A transfer to the general reserve $20 000
Increase of the asset revaluation reserve to $80 000
Assuming that Carnation Ltd applies the equity method in its own books, the entry to record the dividend receivable from Bloom Ltd during the year ended 31 December 2022 would include a:

A) DR Dividend revenue account.
B) DR Investment in associate account.
C) CR Dividend revenue account.
D) CR Investment in associate account.

Correct Answer:

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