Question

Zwick Company bought 28,000 shares of the voting common stock of Handy Corporation in January 2018. In December, Handy announced $200,000 net income for 2018 and declared and paid a cash dividend of $2 per share on all 200,000 shares of its outstanding common stock. Zwick Company's dividend revenue from Handy Corporation in December 2018 would be:

Muliple Choice 

• $28,000
• $0
• None of these answer choices are comect
• $6,000

Answer 1

Option D

Dividend revenue

= Shares held by Zwick Corporation * Dividends issued per share

= 28,000 * 2 per share

= 56,000