Please explain how to get the solutions, not just the answers. I already have the correct answers.

1.Company X recently acquired stocks worth 40% of Company Y. Company Y had purchased equipment with no salvage value and a useful life of 5 years for $50,000. The fair value of the equipment on the date of acquisition was $60,000.

How will this affect Company X's net income?

Selected Answer:$10,000 increase

Answers:$2,000 increase

$2,000 decrease

$10,000 increase

$10,000 decrease

2.Which of the following classifications for securities can only include equity securities?

Selected Answer:Securities Available - for - Sale

Answers:Trading Securities

Securities Available - for - Sale

Held to Maturity Securities

None of the above

3.Which is true regarding an impairment test for PP&E?

Selected Answer:The amount of any impairment loss is the difference between the asset's book value and the undiscounted sum of the asset's estimated future cash flows.

Answers:Step 1 is comparing the asset's book value to the undiscounted sum of the asset's estimated future cash flows.

Impairment is indicated if the asset's fair value is greater than its book value.

The amount of any impairment loss is the difference between the asset's book value and the undiscounted sum of the asset's estimated future cash flows.

None of the above