Park Inc owns 35 percent of Exeter Corporation. During the calendar year 2013, Exeter had net earnings of $300,000 and paid dividends of $36,000 . Park mistakenly accounted for the investment in Exeter using the cost method rather than the equity method of accounting. What effect would this have on the investment account and net income, respectively?
a. Understate, overstate
b. Overstate, understate
c. Overstate, overstate
d. Understate, understate
e. None of these answer choices is correct.
D
You might also like to view...
Discuss how the global dispersion of value chains has influenced the traditional modes of international expansion.
What will be an ideal response?
At which stage in a criminal case are the charges against the defendant read and the defendant may plead guilty, not guilty, or nolo contendere?
a. Discovery b. Pretrial motions c. Arraignment d. Trial and appeal
________ are infrequently purchased consumer products with unique characteristics for which buyers are willing to make a special purchase effort
A) Shopping products B) Unsought products C) Specialty products D) Industrial products E) Line extensions
Promotional objectives and the appeal and executional style of advertising strongly affect the selection of media
Indicate whether the statement is true or false a. True b. False