Question: In its financial statements, Pulham Corp. uses the equity method of accounting for its 30% ownership of Angles Corp. At December 31, 2010, Pulham has

In its financial statements, Pulham Corp. uses the equity method of accounting for its 30% ownership of Angles Corp. At December 31, 2010, Pulham has a receivable from Angles. How should the receivable be reported in Pulham’s 2010 financial statements?

a. None of the receivable should be reported, but the entire receivable should be offset against Angles’

payable to Pulham.

b. 70% of the receivable should be separately reported, with the balance offset against 30% of Angles’

payable to Pulham.

c. The total receivable should be disclosed separately.

d. The total receivable should be included as part of the investment in Angles, without separate disclosure.

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