Equity investment : Equity investments are stock instruments which claim ownership in the investee company and pay dividend revenue to the investor company. Equity method : Equity method is the method used for accounting equity investments which claim a significant influence of above 20% but less than 50% in the outstanding stock of the investee company. To explain : The change in stock investment balance for Company H.

Question

The Great Eastern TableGreat Eastern Table Company produces dining tables in a three-stage process: Sawing, Assembly, and Staining. Costs incurred in the Sawing Department during September are summarized as follows: Working in process inventory sawing. September 1 balance = 0Direct materials = 1,860,000Direct labor = 143,000Manufacturing overhead = 161,500Direct materials (lumber) are added at the beginning of the sawing process, while conversion costs are incurred evenly throughout the process. September activity in the Sawing Department included sawing of 13,000 meters of lumber, which were transferred to the Assembly Department. Also, work began on 2,000 meters of lumber, which on September 30 were 75% of the way through the sawing process.

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Question

Chapter 13, Problem 13EX

To determine

Equity investment:

Equity investments are stock instruments which claim ownership in the investee company and pay dividend revenue to the investor company.

Equity method:

Equity method is the method used for accounting equity investments which claim a significant influence of above 20% but less than 50% in the outstanding stock of the investee company.

To explain: The change in stock investment balance for Company H.

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The Great Eastern TableGreat Eastern Table Company produces dining tables in a three-stage process: Sawing, Assembly, and Staining. Costs incurred in the Sawing Department during September are summarized as follows: Working in process inventory sawing. September 1 balance = 0Direct materials = 1,860,000Direct labor = 143,000Manufacturing overhead = 161,500Direct materials (lumber) are added at the beginning of the sawing process, while conversion costs are incurred evenly throughout the process. September activity in the Sawing Department included sawing of 13,000 meters of lumber, which were transferred to the Assembly Department. Also, work began on 2,000 meters of lumber, which on September 30 were 75% of the way through the sawing process.

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