Equity Method: The equity method is only used when the investor can influence the operating or financial decision of the investee. If there is no major influence over the investee then the investor uses the cost method to account for investment. : Preparation of schedule to compute the balance in T’s account “Investment in P’s” as of year-end 2015 and preparation of journal entries for the elimination of investment account.

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Answer 1

Question

Chapter 11, Problem 7E

To determine

Equity Method:

The equity method is only used when the investor can influence the operating or financial decision of the investee. If there is no major influence over the investee then the investor uses the cost method to account for investment.

: Preparation of schedule to compute the balance in T’s account “Investment in P’s” as of year-end 2015 and preparation of journal entries for the elimination of investment account.

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Answer 2

Question

Chapter 11, Problem 7E

To determine

Equity Method:

The equity method is only used when the investor can influence the operating or financial decision of the investee. If there is no major influence over the investee then the investor uses the cost method to account for investment.

: Preparation of schedule to compute the balance in T’s account “Investment in P’s” as of year-end 2015 and preparation of journal entries for the elimination of investment account.

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Answer 3

Question

Chapter 11, Problem 7E

To determine

Equity Method:

The equity method is only used when the investor can influence the operating or financial decision of the investee. If there is no major influence over the investee then the investor uses the cost method to account for investment.

: Preparation of schedule to compute the balance in T’s account “Investment in P’s” as of year-end 2015 and preparation of journal entries for the elimination of investment account.

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Answer 4

Question

Chapter 11, Problem 7E

To determine

Equity Method:

The equity method is only used when the investor can influence the operating or financial decision of the investee. If there is no major influence over the investee then the investor uses the cost method to account for investment.

: Preparation of schedule to compute the balance in T’s account “Investment in P’s” as of year-end 2015 and preparation of journal entries for the elimination of investment account.

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Answer 5

Chapter 11, Problem 7E

To determine

Equity Method:

The equity method is only used when the investor can influence the operating or financial decision of the investee. If there is no major influence over the investee then the investor uses the cost method to account for investment.

: Preparation of schedule to compute the balance in T’s account “Investment in P’s” as of year-end 2015 and preparation of journal entries for the elimination of investment account.

Answer 6

Chapter 11, Problem 7E

To determine

Equity Method:

The equity method is only used when the investor can influence the operating or financial decision of the investee. If there is no major influence over the investee then the investor uses the cost method to account for investment.

: Preparation of schedule to compute the balance in T’s account “Investment in P’s” as of year-end 2015 and preparation of journal entries for the elimination of investment account.

Answer 7

Chapter 11, Problem 7E

To determine

Equity Method:

The equity method is only used when the investor can influence the operating or financial decision of the investee. If there is no major influence over the investee then the investor uses the cost method to account for investment.

: Preparation of schedule to compute the balance in T’s account “Investment in P’s” as of year-end 2015 and preparation of journal entries for the elimination of investment account.

Answer 8

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Answer 9

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Answer 10

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Answer 11

Ch. 11 - Prob. 1UTI Ch. 11 - Prob. 2UTI Ch. 11 - Prob. 3UTI Ch. 11 - Prob. 5UTI Ch. 11 - Prob. 1.2E Ch. 11 - Prob. 1.3E Ch. 11 - Prob. 1.4E Ch. 11 - Prob. 4E Ch. 11 - Prob. 6.2E Ch. 11 - Prob. 7E

Solution Summary: The author explains that the equity method is only used when the investor can influence the operating or financial decision of the investee.

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Chapter 11 Solutions