[Jordan]

I know this is one of the easiest questions on FAR, and 9.5 out of 10 times I would have chosen the correct answer C, but today I chose B because I swore a few days ago I had a similar problem, but I had to amortize the difference between BV and FV. So in this problem I did 200,000*30% = 60,000 and decreased the investment account to 220,000. When I read the answer I realized I thought way too much into the problem, and it was just a simple equity method calculation, but I can’t for the life of me think of what problem I came across the other day where that difference was amortized. Am I losing it, or does anyone know of a concept I may be confusing this with?

On January 2, Year 1, Kean Co. purchased a 30% interest in Pod Co. for $250,000. On this date, Pod’s stockholders’ equity was $500,000. The carrying amounts of Pod’s identifiable net assets approximated their fair values, except for land whose fair value exceeded its carrying amount by $200,000. Pod reported net income of $100,000 for Year 1, and paid no dividends. Kean accounts for this investment using the equity method. In its December 31, Year 1, balance sheet, what amount should Kean report as investment in subsidiary?
a. 270,000
b. 220,000
c. 280,000
d. 210,000