Which of the Following Is True Regarding the Change from the Fair-Value

question 47

Multiple Choice

Which of the following is true regarding the change from the fair-value method to the equity method?

• A) Dodge must record a debit to additional paid-in capital in the amount of $200,000.
• B) Dodge must record a debit to additional paid-in capital for $15,000.
• C) Dodge must retrospectively apply the equity method to interests reported under the fair-value method.
• D) Dodge must record a debit of $200,000 to the Gates Investment Account.
• E) Dodge must record a credit of $15,000 to the Gates Investment Account.

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Definitions:

Time-Driven Activity-Based Costing

A costing method that assigns resource costs directly to products or services based on precise measurements of how much time is needed for specific activities.

Order Fulfillment Department

The division within a company responsible for processing and delivering orders to customers, ensuring product delivery aligns with customer expectations.

Capacity Analysis

The evaluation of a company's ability to meet its production goals with the available resources and facilities.

Time-Driven Activity-Based Costing

A costing method that estimates the costs of resources used in business activities, based on the time those activities take and the rate at which resources are consumed.