Describe the equity method and the cost method of investor accounting for acquisitions

Q: Q. Which of the following is within the scope of investments accounted for using the equity method…

A: Equity Method of accounting:           Any entity can invest in another entity by acquiring less…

Q: IFRS requires companies to measure their financial assets at fair value except when based on:(a)…

A: International Financial Reporting Standards:   IFRS (International Financial Reporting Standards) is…

Q: Demonstrate how to identify and account for equity investments accounted forunder the equity method

A: Equity method requires the investor to recognize investment income equal to its share percentage…

Q: Explain the topics of equity accounts.

A: Value, often alluded to as investors' price (or proprietors' price for in secret command…

Q: 37. When an entity reduces its interest in an investment in equity securities accounted for by the…

A: Introduction: If an investor company invests and acquires between 20 to 50% stake in the investee…

Q: How would you describe a change that a company makes from the equity method to the fair-value method…

A: Definition:   Equity method: Equity method is the method used for accounting equity investments…

Q: Whichever of the below offers the most potential for allowing the investor to use off-balance-sheet…

A: Balance sheet: The balance sheet shows the financial position of the company by recording all the…

Q: Indicate how unrealized holding gains and losses should be reported for investments classified as…

A: Unrealized holding gains and losses: An unrealized gain is a profit recorded on paper results from…

Q: Explain the concepts of business acquisitions, mergers and consolidation of financial statements.

A: The merger or acquisition of smaller companies into large business entities is known as…

Q: Required Prepare the consolidated statement of profit or loss and extract from the statement of…

A: Consolidated Statement: It is a Financial Statement, which shows the entire activity of the…

Q: How does a company determine whether to account for an equity investment using the fair value…

A: Financial Management: In layman’s words, financial management is the management of the finance or…

Q: ._______ An offer to purchase the stock of a firm targeted for acquisition.

A: Step 1    A takeover bid is a business transaction in which one firm bid to buy another. The target…

Q: y method for the preparation of consolidated financial statements in order to make investment…

A: Argue for using the equity method for the preparation of consolidated financial statements in order…

Q: Identify transaction belonging to Investing Activities O a. Interest received O b. Marketable…

A: The cash flow statement is prepared to record the cash flow from various activities during the…

Q: The account Unrealized Gain (Loss) on Trading Investments should be included on the

A: Unrealized gains and losses: These are gains and losses which are unrealized and are the result of…

Q: A firm can use which method of financing for an acquisition structured as either an asset or stock…

A: In order to acquire an asset or stock, the firm can use the following financing option Either…

Q: Why is the Equity Valuation method is preferable from the point of view of an investor in valuing…

A: Valuation is the process of ascertaining the market value of the business or an asset. The valuation…

Q: Explain the concepts of business acquisitions, mergers and consolidation of financial statements…

A: The concepts of business mergers, acquisitions, and consolidation are discussed with a view to…

Q: investments in equity instruments are financial assets because they are a) cash equivalents b)…

A: Financial assets are the assets that are derived from contractual claims. It is a more liquid asset…

Q: Which of the following results in a decrease in the investment account when applying the equity…

A: The equity method is generally applied in case of investment in associate/ joint venture

Q: Expenses in acquiring another company may be related to the issuance of stocks , legal , financial…

A: The expenses are treated in the books in the following ways: - Issuance of Stock: The entry for…

Q: Which of the following results in an increase in the Equity in the Investee Income acct. when…

A: Equity of the investor means the amount that is invested by the investor in the company. Equity…

Q: In a stock acquisition accounted for by the equity method, a portion of the purchase price often is…

A: Stock: It refers to a security issued in a form of certificate. It implies the right of ownership of…

Q: Which of the following are Assets, Liabilities, EquityAccounts PayableCommon StockBonds…

A: Assets are the resources available from which a business is expected to derive future economic…

Q: xplain the classification of SHORT-TERM INVESTMENTS in the corporate balance sheets while…

A: Short Term Investment: Short term investments are temporary investments. The investments are those…

Q: Explain what method is used to account for investments in equity securities with 20% to 50%…

A: Investments in equity securities with 20% to 50% ownership, the investor is said to have significant…

Q: Demonstrate how to identify and account for equity investments classified forreporting purposes as…

A: Equity investments are those investments that are invested in a company through purchase of shares…

Q: How the equity method accounting rules work?

A: Step 1 Equity method accounting is used for inter-corporate investments. It is used when the…

Q: Explain how the investment account is affected byinvestee activities under the equity method.

A: Equity method: Equity method is the method used for accounting equity investments which claim a…

Q: Comprehensive income consists of O operating income + other income and losses net income + other…

A: please like the answer your response matters  comprehensive income consists of other comprehensive…

Q: Describe the Impairment of Equity Method Investments.

A: If a carrying amount of an investment is an associate or joint venture tends to exceed their…

Q: choose the correct answer: Equity security acquired for trading should be measured at reporting…

A: Equity Securities Held for Trading Equity securities which are held for trading purpose which can be…

Q: A company acquires a rather large investment in another corporation. What criteria determine whether…

A: Equity method: Equity method is the accounting method used for accounting equity investments which…

Q: How would a debit balance in Unrealized Gain (Loss) on Available-for-Sale Investments be reported in…

A: Available-for-sale securities: These are short-term or long-term investments in debt and equity…