Armando Company owns 17,000 of the 70,000 shares of common stock outstanding of Tito Company and exercises a significant influence over its operating and financial policies. The investment should be accounted for by the

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According to the information provided, Armando Company exercises a significant influence over Tito Company. This indicates that the equity method should be used to account for the investment. Under the equity method, the investment is initially recorded at cost and subsequently adjusted for the investor's share of the investee's earnings or losses.

Armando Company Owns 17,000 of the 70,000 Shares of Common