Big Entity (BE) has an investment in Large Entity (LE) recorded at cost for $100,000. Ultimately, it is determined that the fair value of this investment is $150,000 based on a revaluation of inventory. Using the equity method, what is the proper adjusting entry for this differential?
A) Dr Inventory 50,000
B) Cr Inventory 50,000
C) Dr Differential 50,000
D) Dr Goodwill 50,000
E) Cr Goodwill 50,000
F) None of the above.
Correct Answer:
Verified
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