9th Edition

ISBN: 9781260180657

Author: SPICELAND

Publisher: MCG

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Textbook Question

Chapter 12, Problem 12.15BE

Change in principle; change to the equity method

• LO12-7

At the beginning of 2018, Pioneer Products’ ownership interest in the common stock of LLB Co. increased to the point that it became appropriate to begin using the equity method of accounting for the investment. The balance in the investment account was $44 million at the time of the change but would have been $56 million if Pioneer had used the equity method since first investing in LLB. How should Pioneer report the change? Would your answer be the same if Pioneer is changing from the equity method rather than to the equity method?

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Chapter 12, Problem 12.14BE

Chapter 12, Problem 12.16BE

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Chapter 12 Solutions

INTERMEDIATE ACCOUNTING(LL)-W/2 ACCESS

Ch. 12 - All investments in debt securities are classified...Ch. 12 - When market rates of interest rise after a...Ch. 12 - Does GAAP distinguish between fair values that are...Ch. 12 - When a debt investment is acquired to be held for...Ch. 12 - Prob. 12.5Q Ch. 12 - What is comprehensive income? Its composition...Ch. 12 - Why are holding gains and losses treated...Ch. 12 - Prob. 12.8Q Ch. 12 - Prob. 12.9Q Ch. 12 - Prob. 12.10Q

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Solution Summary: The author explains that equity method is used for accounting equity investments that claim a significant influence of above 20% but less than 50% in the outstanding stock of the investee company.

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