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Last year, Chrysler used the equity method to account for its 35% ownership interest in...

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Accounting

Last year, Chrysler used the equity method to account for its 35% ownership interest in Challenger Corporation. This year, Chrysler increased its ownership interest to 100%. At the end of this year, Chrysler should:

a. reclassify the investment as trading and report the unrealized gains and losses in the income statement.

b. calculate the acquisition goodwill and report only its pro-rata share of Challenger's assets, liabilities, revenues, and expenses.

c. consolidate all of Challenger's assets, liabilities, revenues, and expenses, and report the acquisition goodwill on the balance sheet.

d. consolidate all of Challenger's assets, liabilities, revenues and expenses and report a noncontrolling interest in shareholders equity.

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