Equity method: just NI and no dividends on parents income?

CFA Level II
#1

NI = 18K DIV=10k So parents 30% = 5.4K or 2.4K? I thought all three methods reported the same income on parents I/S. Can you please help?

#2

5.4K, the dividend reduces the equity investment account on the balance sheet, does not affect NI.

#3

When you get Dividend, you record it as a Cash receipt and a reduction in the Investment Balance ( So that the balance sheet still Balances). It does not get recorded as Income.

#4

oh good catch Also for clarification does the 5.4K get added to the NI directly? If so, does that mean the tax rate on their regular NI and investment NI are different (assuming the company they invested in pays a lower %)