Chapter 14: Equity Method Practice Problem

 
On March 3, 2008, Green Ridge Corporation purchased a 40% interest in Mountain Sports, Inc. paying $317,000 cash for the stock. This acquisition gave Green Ridge significant influence over Mountain Sports.   Therefore Green Ridge used the equity method to account for this investment.

Requirements:

b)   On Nov. 10, 2008, Mountain Sports distributed cash dividends in the amount of $20,000 to its stockholders. Write the journal entry to record Green Ridge's receipt of its share of the dividends.