The underlying equity of an investment at acquisition: Question 10Answer a. Is equal to the fair value of the investee’s net assets times the percentage acquired b. Is equal to the book value of the investee’s net assets times the percentage acquired c. Is recorded in the investment account under the equity method d. Minus the cost of the investment is assigned to goodwill

The underlying equity of an investment at acquisition: Question 10Answer a. Is equal to the fair value of the investee’s net assets times the percentage acquired b. Is equal to the book value of the investee’s net assets times the percentage acquired c. Is recorded in the investment account under the equity method d. Minus the cost of the investment is assigned to goodwill

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter12: Intangibles

Section: Chapter Questions

Problem 9MC

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The underlying equity of an investment at acquisition: Question 6Answer a. Is recorded in the investment account under the equity method b. Is equal to the book value of the investee's net assets times the percentage acquired C. Minus the cost of the investment is assigned to goodwill d. Is equal to the fair value of the investee's net assets times the percentage acquired
How is an available-for-sale investment recorded on the financial statements? At fair market value on the balance sheet As an expense on the income statement At cost plus any acquisition costs on the balance sheet
Which of the following results in an increase in the Equity in the Investee Income acct. when applying the equity method? Amortizations of purchase price over book value on date of purchase Amortization since date of purchase of purchase price over book value on date of purchase Sale of portion of the investment at a gain to the investor Investors share of gross profit from intra-entity inventory sale for the prior year Sale of a portion of the investment at a loss
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