Question
The fair value of Cameron Inc.s depreciable assets exceeds their book value by $50 million. The assets have an average remaining useful life of 15
The fair value of Cameron Inc.s depreciable assets exceeds their book value by $50 million. The assets have an average remaining useful life of 15 years and are being depreciated by the straight-line method. Lake Industries buys 30% of Camerons common shares. How will the situation described affect Lakes investment account in Cameron?
a. | Lake will reduce the investment by $3.3 million per year. | |
b. | Lake will increase the investment by $3.3 million per year. | |
c. | Lake will reduce the investment by $1 million per year. | |
d. | Lake will increase the investment by $1 million per year. | |
e. | It will not make a difference. |
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