LFM Owned 40 Percent of EMD's Common Stock, and as a Result

LFM owned 40 percent of EMD's common stock, and as a result, accounted for the investment using the equity method. After the fifth year of owning the stock, the investment account had a credit balance. This could only happen if LFM

A) recorded net losses that were more than the net income.
B) distributed dividends in excess of the accumulated earnings.
C) had accumulated income that was less than the additional depreciation that LFM recorded as a result of purchasing the stock when market value of the assets was in excess of book value.
D) experienced any, or a combination, of the conditions described in the three other responses.