Refer to the facts in the previous question. If Pacer Company uses the lower of cost or market method of accounting for its investment in Queen Company, and the value of its investment hasn't changed, its Investment in Queen Company account on December 31, 2020, should be

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If Pacer Company uses the lower of cost or market method of accounting for its investment in Queen Company and the inventory has not changed, the value of the investment should be reported at its lower cost or market value. Since the market value of the investment is $80,000 and the original cost was $100,000, the investment should be recorded at $80,000. Therefore, the Investment in Queen Company account on December 31, 2020, should be $80,000.

Refer to the Facts in the Previous Question