Advanced Accounting 12th Edition by Joe Ben Hoyle,Thomas Schaefer , Timothy Doupnik

Exercise 11

Wilson Company acquired 40 percent of Andrews Company at a bargain price because of losses expected to result from Andrews's failure in marketing several new products. Wilson paid only $100,000, although Andrews's corresponding book value was much higher. In the first year after acquisition, Andrews lost $300,000. In applying the equity method, how should Wilson account for this loss