Problem

Company X owns 40 percent of Company Y and exercises significant influence over the manage...

Company X owns 40 percent of Company Y and exercises significant influence over the management of Company Y. Therefore, Company X uses what method of accounting for reporting its ownership of stock in Company Y?

a. The amortized cost method,

b. The equity method.

c. The fair value method.

d.  Consolidation of the financial statements of companies X and Y.

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