Pahl Corporation owns a 60% interest in Sauer Corporation, acquired at book value equal to fair value at the beginning of 20X1. On December 20, 20X1 Sauer declares dividends of $80,000, and the dividends remain unpaid at year end. Pahl has not recorded the dividends receivable at December 31. A consolidated working paper entry is necessary to
1. Enter $48,000 dividends receivable in the consolidated balance sheet.
2. Eliminate the dividend payable account in the consolidated balance sheet.
3. Reduce the dividend payable account to $32,000 in the consolidated balance sheet.
4. Enter the $80,000 dividends receivable in the consolidated balance sheet.