ADVANCED ACCT CUSTOM W/CONNECT
14th Edition
ISBN: 9781307697711
Author: Hoyle
Publisher: MCG/CREATE
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Textbook Question
Chapter 1, Problem 1P
When an investor uses the equity method to account for investments in common stock, the investor’s share of cash dividends from the investee should be recorded as
a. A deduction from the investor’s share of the investee’s profits.
b. Dividend income.
c. A deduction from the stockholders’ equity account, Dividends to Stockholders.
d. A deduction from the investment account.
(AICPA adapted)
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When an investor uses the equity method to account for investments in common stock, the investor’s share of cash dividends from the investee should be recorded as
A deduction from the investor’s share of the investee’s profits.
Dividend income.
A deduction from the stockholders’ equity account, Dividends to Stockholders.
A deduction from the investment account.
(AICPA adapted)
Choose the correct.When an investor uses the equity method to account for investments in common stock, the investor’s share of cash dividends from the investee should be recorded as:
a. A deduction from the investor’s share of the investee’s profits.b. Dividend income.c. A deduction from the stockholders’ equity account, Dividends to Stockholders.d. A deduction from the investment account(AICPA adapted)
When an investor uses the equity method to account for investments in common stock, cash dividend received by the investor from the investee should be recorded as _____.
A. A deduction from the investment account.
B. A deduction from the stockholders' equity account, dividends to stockholders.
C. Dividend income.
D. A deduction from the investor's share of the investor's profits.
Chapter 1 Solutions
ADVANCED ACCT CUSTOM W/CONNECT
Ch. 1 - What advantages does a company achieve when it...Ch. 1 - A company acquires a rather large investment in...Ch. 1 - What accounting treatments are appropriate for...Ch. 1 - Prob. 4QCh. 1 - Why does the equity method record dividends from...Ch. 1 - Prob. 6QCh. 1 - Smith. Inc., has maintained an ownership interest...Ch. 1 - Prob. 8QCh. 1 - Because of the acquisition of additional investee...Ch. 1 - Prob. 10Q
Ch. 1 - Prob. 11QCh. 1 - Prob. 12QCh. 1 - In a stock acquisition accounted for by the equity...Ch. 1 - Prob. 14QCh. 1 - What is the difference between downstream and...Ch. 1 - Prob. 16QCh. 1 - Prob. 17QCh. 1 - What is the fair-value option for reporting equity...Ch. 1 - When an investor uses the equity method to account...Ch. 1 - Prob. 2PCh. 1 - Prob. 3PCh. 1 - Under fair-value accounting for an equity...Ch. 1 - When an equity method investment account is...Ch. 1 - Prob. 6PCh. 1 - Prob. 7PCh. 1 - Prob. 8PCh. 1 - Evan Company reports net income of $140,000 each...Ch. 1 - Prob. 10PCh. 1 - Prob. 11PCh. 1 - Prob. 12PCh. 1 - Prob. 13PCh. 1 - Prob. 14PCh. 1 - Prob. 15PCh. 1 - Prob. 16PCh. 1 - Prob. 17PCh. 1 - Prob. 18PCh. 1 - Prob. 19PCh. 1 - Prob. 20PCh. 1 - Prob. 21PCh. 1 - Prob. 23PCh. 1 - Matthew, Inc., owns 30 percent of the outstanding...Ch. 1 - Prob. 26PCh. 1 - Prob. 28PCh. 1 - Prob. 29PCh. 1 - Prob. 30PCh. 1 - Prob. 31P
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- Cash dividends declared out of current earnings were distributed to an investor. How will the investors investment account be affected by those dividends under each of the following accounting methods?arrow_forwardStockholders equity consists of which of the following? A. bonds payable B. retained earnings and accounts receivable C. retained earnings and paid-in capital D. discounts and premiums on bond payablearrow_forwardExplain how the following items affect equity: revenue, expenses, investments by owners, and distributions to owners.arrow_forward
- When an investor uses the equity method to account for investments in common stock, cash dividend received by the investor from the investee should be recorded as _____arrow_forwardHiram Co. uses the equity method to account for investments in common stock. What accounting should be made for dividends received from these investments subsequent to the date of investment?arrow_forwardFor accounting purposes, the method used to account for investments in common stock is determined by: a. the amount paid for the stock by the investor b. whether the acquisition of the stock by the investor was "friendly" or "hostile" c. the extent of an investor's influence over the operating and financial affairs of the investee d. whether the stock has paid dividends in past yearsarrow_forward
- Which is a correct statement below? A. Equity is the residual interest in the liabilities of the entity after deducting all of its assets.B. Subscriptions receivable shall preferably be reflected as a deduction from the related subscribed share capital.C. Share premium is also known as capital stock.D. A deficit is a credit balance in retained earnings.arrow_forwardWhen a business has Available-for-Sale Securities, the account Unrealized Loss on Available-for-Sale Investments should be included in the: Statement of Retained Earnings Income statement Balance sheet as an addition to Long-Term Investments in Stock Balance sheet as a deduction in Stockholders' Equityarrow_forwardWhich one or more of the following would you report as a liability on a statement of financial position: Redeemable Preference Shares, retained earnings, Dividend declared , Loan Notes.arrow_forward
- Under IFRS No. 9, which reporting categories are used to account for equity investments when the investor lacksthe ability to significantly influence the operations of the investee?arrow_forwardFor investments in available-for-sale securities, a debit balance in the Unrealized Holding Gain/Loss account reflects a cumulative unrealized gain. is reported as a negative element in the accumulated other comprehensive income section of shareholders' equity. is reported as a positive element in the accumulated other comprehensive income section of shareholders' equity. is reported as a positive element in the assets section of the balance sheet.arrow_forwardWhat are if any the differences between Stockholder's Equity, Retained Earnings, Common Stock, Additional paid-in-capital, and Par Value? Are they Debit or Credit accounts? Are they found in Proprietorships, Partnerships, or Corporationsarrow_forward
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