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The summarized balance sheets of Thunder Bay Corp.and Fort William Corp.at December 31, 2017 are as follows:
-If Thunder Bay acquired a 30% interest in Fort William on December 31, 2017 for $75,000 and the equity method of accounting for the investment were used, the amount of the debit to Investment in Fort William Corp.would have been
A)$90,000.
B)$75,000.
C)$67,500.
D)$60,000.

Question

Use the following information for questions.
The summarized balance sheets of Thunder Bay Corp.and Fort William Corp.at December 31, 2017 are as follows: 
-If Thunder Bay acquired a 30% interest in Fort William on December 31, 2017 for $75,000 and the equity method of accounting for the investment were used, the amount of the debit to Investment in Fort William Corp.would have been
A)$90,000. 
B)$75,000. 
C)$67,500. 
D)$60,000.

Quizplus · Accepted Answer

The amount of the debit to Investment in Fort William Corp. would have been equal to the cost of the investment, which is $75,000.

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