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:

c)   On Dec. 31, 2008, Mountain Sports reported net income of $140,000 for the year. Write the journal entry to record Green Ridge's share of the income.