(1) Fox Co. maintains an investment portfolio.If Fox buys Owl Co. common stock, which method and treatment should Fox never use for this investment on the balance sheet or income statement:

A. Amortized cost method, with only realized gains and losses included in net income

B. Fair value method, with holding gains and losses included as part of net income

C. Cost method if fair value can never be determined until sold when gain or loss is included in net income

D. Equity method, with investment value adjusted by investor's share of investee's net income

(2) MJM, Inc. allows employees at the end of the year to carry forward up to 75 hours of paid time off at their current salary. Fox is a full-time employee who has unused vacation time of 72hours,andOwl,also a full-timeemployee,has unused vacation time of 79 hours. Fox's hourly rate is $20, and Owl's is $18.How much should MJM record as a liability for the unpaid vacation time at the end of theyear?

$2,760

$2,790

$2,862

$2,850