Usually, an investment of 10 percent in another company's voting stock is reported under the:

a.cost method.

b.fair value method.

c.equity method.

d.None

e.full consolidation method.

On January 1, 2020 Pearl Company acquired 20 percent of the common stock of Safir Corporation for $200,000, at underlying book value. For the same year, Safir reported net income of $50,000. It paid $5,000 dividends during the year. At December 31, 2020, Pearl determined the fair value of the shares of Safir to be $189,000.

What amount would Pearl report as investment in Safir Corporation at the end of the year, if Pearl used the fair value method?

a. $245,000

b. $209,000

c. None

d. $200,000

e. $189,000

On January 1, 2020 Pearl Company acquired 20 percent of the common stock of Safir Corporation for $200,000, at underlying book value. For the same year, Safir reported net income of $50,000. It paid $5,000 dividends during the year. At December 31, 2020, Pearl determined the fair value of the shares of Safir to be $189,000.

What amount would Pearl report as investment in Safir Corporation at the end of the year, if Pearl used the equity method?

a. $200,000

b. $189,000

c.$209,000

d. $245,000

e. None

Under the equity method, an investees dividends declared would

a. none

b. decrease the investors investment account.

c. increase the investors investment account.

d.be the investors loss from investment.

e.be the investors profit from investment.

For securities carried at fair value, an investees dividends declared would

a. None

b. be the investors income from investment.

c. be eliminated in consolidation.

d. decrease the investors investment account.

e. increase the investors investment account.