Segmental Manufacturing owns 35% of Glesson Corp stock.Glesson pays a total of $47,000 in cash dividends for the period.Segmental's entry to record the cash dividend received from Glesson would include a:
A)Credit to Equity Method Investments for $16,450.
B)Debit to Equity Method Investments for $16,450.
C)Debit to Cash for $47,000.
D)Credit to Cash for $16,450.
E)Credit to Investment Revenue for $47,000.

Question

Quizplus · Accepted Answer

Segmental Manufacturing owns 35% of Glesson Corp stock, so it is entitled to 35% of the cash dividends paid by Glesson. Therefore, Segmental's entry to record the cash dividend received from Glesson would include a credit to Equity Method Investments for $16,450 (35% of $47,000).

Segmental Manufacturing Owns 35% of Glesson Corp Stock