Equity method: The equity method keeps the record of the parent ownership interest that is multiplied by the reported net income of the subsidiary. This income will be added to parent investment account and the deduction in this method will be of the parent’s ownership interest multiplied by the reported losses of the subsidiary and parent’s ownership interest multiplied by the declared dividends of the subsidiary. All together equals the equity-adjusted balance. Cost method: The cost method basically retains the original cost of acquisition balance in the subsidiary account. As the income is earned by the subsidiary, no adjustments would be made. : Whether goodwill had been impaired or not, and the reasons behind that.

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Question

Chapter 3, Problem 11E

To determine

Equity method:

The equity method keeps the record of the parent ownership interest that is multiplied by the reported net income of the subsidiary. This income will be added to parent investment account and the deduction in this method will be of the parent’s ownership interest multiplied by the reported losses of the subsidiary and parent’s ownership interest multiplied by the declared dividends of the subsidiary. All together equals the equity-adjusted balance.

Cost method:

The cost method basically retains the original cost of acquisition balance in the subsidiary account. As the income is earned by the subsidiary, no adjustments would be made.

:

Whether goodwill had been impaired or not, and the reasons behind that.

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Question

Chapter 3, Problem 11E

To determine

Equity method:

The equity method keeps the record of the parent ownership interest that is multiplied by the reported net income of the subsidiary. This income will be added to parent investment account and the deduction in this method will be of the parent’s ownership interest multiplied by the reported losses of the subsidiary and parent’s ownership interest multiplied by the declared dividends of the subsidiary. All together equals the equity-adjusted balance.

Cost method:

The cost method basically retains the original cost of acquisition balance in the subsidiary account. As the income is earned by the subsidiary, no adjustments would be made.

:

Whether goodwill had been impaired or not, and the reasons behind that.

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Answer 3

Question

Chapter 3, Problem 11E

To determine

Equity method:

The equity method keeps the record of the parent ownership interest that is multiplied by the reported net income of the subsidiary. This income will be added to parent investment account and the deduction in this method will be of the parent’s ownership interest multiplied by the reported losses of the subsidiary and parent’s ownership interest multiplied by the declared dividends of the subsidiary. All together equals the equity-adjusted balance.

Cost method:

The cost method basically retains the original cost of acquisition balance in the subsidiary account. As the income is earned by the subsidiary, no adjustments would be made.

:

Whether goodwill had been impaired or not, and the reasons behind that.

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Answer 4

Question

Chapter 3, Problem 11E

To determine

Equity method:

The equity method keeps the record of the parent ownership interest that is multiplied by the reported net income of the subsidiary. This income will be added to parent investment account and the deduction in this method will be of the parent’s ownership interest multiplied by the reported losses of the subsidiary and parent’s ownership interest multiplied by the declared dividends of the subsidiary. All together equals the equity-adjusted balance.

Cost method:

The cost method basically retains the original cost of acquisition balance in the subsidiary account. As the income is earned by the subsidiary, no adjustments would be made.

:

Whether goodwill had been impaired or not, and the reasons behind that.

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Answer 5

Chapter 3, Problem 11E

To determine

Equity method:

The equity method keeps the record of the parent ownership interest that is multiplied by the reported net income of the subsidiary. This income will be added to parent investment account and the deduction in this method will be of the parent’s ownership interest multiplied by the reported losses of the subsidiary and parent’s ownership interest multiplied by the declared dividends of the subsidiary. All together equals the equity-adjusted balance.

Cost method:

The cost method basically retains the original cost of acquisition balance in the subsidiary account. As the income is earned by the subsidiary, no adjustments would be made.

:

Whether goodwill had been impaired or not, and the reasons behind that.

Answer 6

Chapter 3, Problem 11E

To determine

Equity method:

The equity method keeps the record of the parent ownership interest that is multiplied by the reported net income of the subsidiary. This income will be added to parent investment account and the deduction in this method will be of the parent’s ownership interest multiplied by the reported losses of the subsidiary and parent’s ownership interest multiplied by the declared dividends of the subsidiary. All together equals the equity-adjusted balance.

Cost method:

The cost method basically retains the original cost of acquisition balance in the subsidiary account. As the income is earned by the subsidiary, no adjustments would be made.

:

Whether goodwill had been impaired or not, and the reasons behind that.

Answer 7

Chapter 3, Problem 11E

To determine

Equity method:

The equity method keeps the record of the parent ownership interest that is multiplied by the reported net income of the subsidiary. This income will be added to parent investment account and the deduction in this method will be of the parent’s ownership interest multiplied by the reported losses of the subsidiary and parent’s ownership interest multiplied by the declared dividends of the subsidiary. All together equals the equity-adjusted balance.

Cost method:

The cost method basically retains the original cost of acquisition balance in the subsidiary account. As the income is earned by the subsidiary, no adjustments would be made.

:

Whether goodwill had been impaired or not, and the reasons behind that.

Answer 8

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Ch. 3 - Prob. 1UTI Ch. 3 - Prob. 2UTI Ch. 3 - Prob. 3UTI Ch. 3 - Prob. 4UTI Ch. 3 - Prob. 5UTI Ch. 3 - Prob. 6UTI Ch. 3 - Prob. 7UTI Ch. 3 - Prob. 1E Ch. 3 - Prob. 2E Ch. 3 - Prob. 3.1E

Solution Summary: The author explains the equity method and the cost method to determine whether goodwill has been impaired or not.

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