Equity investments: Equity investments are stock instruments which claim ownership in the investee company and pay a 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. Journal entry : Journal entry is a set of economic events which can be measured in monetary terms. These are recorded chronologically and systematically. Debit and credit rules: Debit an increase in asset account, increase in expense account, decrease in liability account, and decrease in stockholders’ equity accounts. Credit decrease in asset account, increase in revenue account, increase in liability account, and increase in stockholders’ equity accounts. To journalize: The stock investment transactions for Company Y, under the equity method
Equity investments: Equity investments are stock instruments which claim ownership in the investee company and pay a 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. Journal entry : Journal entry is a set of economic events which can be measured in monetary terms. These are recorded chronologically and systematically. Debit and credit rules: Debit an increase in asset account, increase in expense account, decrease in liability account, and decrease in stockholders’ equity accounts. Credit decrease in asset account, increase in revenue account, increase in liability account, and increase in stockholders’ equity accounts. To journalize: The stock investment transactions for Company Y, under the equity method
Solution Summary: The author explains the equity 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.
Definition Definition Assets available to stockholders after a company's liabilities are paid off. Stockholders’ equity is also sometimes referred to as owner's equity. A stockholders’ equity or book value generally includes common stock, preferred stock, and retained earnings and is an indicator of a company's financial strength.
Chapter 15, Problem 15.3BPE
To determine
Equity investments: Equity investments are stock instruments which claim ownership in the investee company and pay a 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.
Journal entry: Journal entry is a set of economic events which can be measured in monetary terms. These are recorded chronologically and systematically.
Debit and credit rules:
Debit an increase in asset account, increase in expense account, decrease in liability account, and decrease in stockholders’ equity accounts.
Credit decrease in asset account, increase in revenue account, increase in liability account, and increase in stockholders’ equity accounts.
To journalize: The stock investment transactions for Company Y, under the equity method
Kelly Textiles estimated manufacturing overhead for the year to be $315,600. At the end of the year, the actual direct labor hours worked were 27,600 hours. The actual manufacturing overhead incurred was $310,800, and overhead was overapplied by $12,000. If the predetermined overhead rate is based on direct labor hours, then the estimated direct labor hours at the beginning of the year used in calculating the predetermined overhead rate must have been___. a. 27,600 direct labor-hours b. 26,800 direct labor-hours c. 27,000 direct labor-hours d. 28,000 direct labor-hours
Accounting questions
Chapter 15 Solutions
Working Papers, Chapters 1-17 for Warren/Reeve/Duchac’s Accounting, 27th and Financial Accounting, 15th