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Business, 11.02.2020 18:58 theojw

On December 15, Year 4, Far-Lap Co. paid $200,000 cash for 40% of the outstanding common shares of Dunwunder, Inc. On that date, Far-Lap intended to sell all of these shares soon after the close of its fiscal year on December 31, Year 4. Far-Lap’s equity stake permitted it to exercise significant influence over Dunwunder. For the period March 1 through December 15, Year 4, Dunwunder reported $5,600 in net income. Which of the following is the best reason for Far-Lap not to use the equity method to account for its investment in Dunwunder?

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On December 15, Year 4, Far-Lap Co. paid $200,000 cash for 40% of the outstanding common shares of D...
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