Chapter 2, Problem 2.4E

a.

To determine

Concept introduction

In the organization, there are two important methods to calculate one’s accounts. The equity method is used when the investor has acquired more reliable resources and gains profit shares by owning $20\%-50\%$ of the firm assets while the fair value method is used when the accounts are rational and unbiased in the balance sheet of reporting.

To calculate: The equity and the fair value method.

b.

To determine

Introduction In the organization, there are two important methods to calculate one’s accounts. The equity method is used when the investor has acquired more reliable resources and gains profit shares by owning $20\%-50\%$ of the firm assets while the fair value method is used when the accounts are rational and unbiased in the balance sheet of reporting.

To calculate: The equity and the fair value method.