Refer to the facts in problem 4).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 31,2009,should be

Question

Quizplus · Accepted Answer

According to the information given in problem 4, the cost of Pacer Company's investment in Queen Company was $80,000, and the market value of the investment was $88,000 on December 31, 2008. Since the value of the investment hasn't changed, Pacer would still use the lower of cost or market method and the Investment in Queen Company account would be valued at the lower amount, which is the cost of $80,000. Therefore, the correct answer is C.

Refer to the Facts in Problem 4)