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9. Park Co. uses the equity method to account for

Question : 9. Park Co. uses the equity method to account for : 1262

9. Park Co. uses the equity method to account for its January 1, 20X5, purchase of Tun Inc.'s common stock. On January 1, 20X5, the fair values of Tun's depreciable assets and land exceeded their carrying amounts. How do these excesses of fair values over carrying amounts affect Park's reported year-end Earnings from Investment in Tun for 20X5?

Option A

Option B

Option C

Option D

 

Depreciable assets excess

Land excess

A.

Decrease

No effect

B.

Decrease

Decrease

C.

Increase

No effect

D.

Increase

Increase

 

Solution
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