Accounting Multiple Choice 5,6,7

5.) The income from an equity method investee is reported on one line of the investor company's income statement except when... a. the cost method is used. b. the investee has discontinued operations. the investor company is amortizing cost-book value differentials. d. the investor company changes from the cost to the equity method. c. 6.) In reference to the determination of goodwill impairment, which of the following statements is correct? a. The goodwill impairment test is a three-step process. b. If the reporting unit's fair value exceeds its carrying value, goodwill is unimpaired. Firms must first compare carrying values (book values) at the headquarter level. d. Firms can reverse previously recognized impairment losses. C. 7) If the amount paid by an investor (parent) is less than the proportional total of the estimated fair value of investee's (subsidiary's) assets acquired and liabilities assumed, the difference is recorded as ... a. Negative goodwill in the balance sheet of the investor. b. Gain from a bargain purchase in the income statement of the investor. Gain from a bargain purchase in the income statement of the investee. d. Allocated as a reduction to each of the asset and liability accounts when applying consolidation accounting by the investor. c