50. Dane, Inc., owns 35% of Marin Corporation. During the calendar year 2007, Marin had net
earnings of $300,000 and paid dividends of $30,000. Dane mistakenly recorded these
transactions using the fair value method rather than the equity method of accounting.
What effect would this have on the investment account, net income, and retained
a. Understate, overstate, overstate
b. Overstate, understate, understate
c. Overstate, overstate, overstate
d. Understate, understate, understate