Obj.2Explain how a change in fair value of an equity investment with less than 20% ownershipB1-29 Reporting change in fair valueis reported on the investor's (a) income statement and (b) balance sheet.oduct lines:costs:

Investment accounting refers to the process of accounting for the acquisition, management, and…

Answered: B1-29 Reporting change in fair value…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Q20 Which is the most suitable method based on the concept that profit is the difference between the owner’s equity at two different points in time during the accounting period. a. None of these methods are correct b. First in first out method c. Last in first out method d. Net change method
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1
Requirement General Journal General Ledger Trial Balance Fair Value Adj Transaction Analysis Fin St Impact For each transaction, indicate the change, if any, in total assets and total equity. If equity changes, indicate whether the change was reflected as a component of net income, or directly within the stockholders' equity portion of the balance sheet. Remember that the change in total assets must agree with the change in total equity. Show less Change in Change in equity: Total assets As a component of net income As a direct component of stockholders' equity Total change in equity Apr. 16) Purchased 4,000 shares of Smith Co. stock at $30 per share. $0 $0 $0 Jul. 7) Purchased 2,500 shares of Edmunds Co. stock at $55 per share. 0 0 Jul. 20) Purchased 1,200 shares of Delray Co. stock at $22 per share. 0 0 Aug. 15) Received an $1.00 per share cash dividend on the Smith Co. stock. 0 Aug. 28) Sold 2,400…
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Q1 Which of the following is not of the methods of valuation? a. Balance sheet – where the firm is valued in terms of its assets b. Discounted cash flow c. Income or earnings- where the firm is valued on some multiple of account income or earnings. d. Market share
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B1-29 Reporting change in fair value Obj.2 Explain how a change in fair value of an equity investment with less than 20% ownership is reported on the investor's (a) income statement and (b) balance sheet.