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Mount Rainier Company owns 100% of the 60,000 outstanding shares of Mount Washington Company. Mount Rainier accounts for the

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Answer #1

The correct option is: No change

Explanation: The Mount Washington company has issued new shares to the public. Under the equity method of accounting of investment, the effect of any changes other than the income statement and capital reserve of the subsidiary shall not have any impact on investment in subsidiary account. Hence issued new shares to the public shall not have any impact on Mount Rainer's financial statements.

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