At the beginning of 2013, Zed Ltd. acquired 15% of the voting shares of Pine Co

Question

At the beginning of 2013, Zed Ltd. acquired 15% of the voting shares of Pine Co (a private company) for $150,000. Zed does not have any significant influence over Pine. Zed follows ASPE. In 2013, Pine earned net income of $70,000 and paid dividends of $40,000. In 2014, Pine earned net income of $80,000 and paid dividends of $100,000. At the end of 2014, what journal entry should Zed make to record the dividends from Pine? a) No entry is required b) DR Cash 12,000 CR Investment in Pine 12,000 c) DR Cash 15,000 CR Investment in Pine 15,000 d) DR Cash 15,000 CR Dividend income 15,000

Explanation / Answer

option d is the correct entry

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