Assume that an investor initially owns 10% of an investee and subsequently purchases another 30%. a) The
Question:
Assume that an investor initially owns 10% of an investee and subsequently purchases another 30%.
a) The initial 10% was classified as trading, but after the second investment, the 40% investment is accounted for with the equity method.
b) The initial 10% was classified as trading, but after the second investment, the 40% investment is classified as available for sale.
c) The initial 10% will continue to be classified as available for sale, and the additional 30% investment is accounted for with the equity method.
d) The initial 10% was classified as available for sale, but after the second investment, the 40% investment is accounted for with the equity method.
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill