Advanced Accounting 10th Edition by Thomas Schaefer, Joe Ben Hoyle, Timothy Doupnik

Exercise 10

How would the answer to problem (4) have been affected if the parent had applied the initial value method rather than the equity method
a.No effect: The method the parent uses is for internal reporting purposes only and has no impact on consolidated totals.
b.The consolidated Equipment account would have a higher reported balance.
c.The consolidated Equipment account would have a lower reported balance.
d.The balance in the consolidated Equipment account cannot be determined for the initial value method using the information given.