Describe each of these methods for recording investment, and indicate their advantages and disadvantages.

Question

Want to see more full solutions like this?

Answer 1

Question

Chapter 3, Problem 1Q

To determine

Describe each of these methods for recording investment, and indicate their advantages and disadvantages.

Expert Solution & Answer

Answer to Problem 1Q

The methods for recording investment are as follows:

Equity method
Initial value method
Partial equity method

Explanation of Solution

Equity method:

The equity method is used when the investor is having the significant influence and the investment balance is reduced by the amount of dividend paid. The method is however best method for accounting of consolidated investments but it is the difficult method to use.

Initial value method:

The dividends are recorded as income under the initial value method. The initial value method differs from the equity method as the dividend is not reduced from the value of the investment.

Partial equity method:

The partial equity method is not that appropriate as the equity method and the fair value method amortizations are accounted under this method.

The partial equity method is however easier than the equity method.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Students have asked these similar questions

ABC Manufacturing Company produces widgets and has been operating for several years. The company's management team is responsible for preparing and monitoring the company's budget to ensure that it stays on track and achieves its financial objectives. ABC Manufacturing Company has recently completed its fiscal year. Management has compiled the planning budget and actual results for the year and has found that the company's actual performance fell short of its budgeted expectations. Management wants your help in gleaning extra information from what we have. The budget and actual results are as follows: Planning budget Sales revenue $5,000 Direct materials 1,000 Direct labor 1,500 Manufacturing overhead 750 Selling and administrative expenses 1,500 Profit $250 Actual results Sales revenue $4,500 Direct materials 1,200 Direct labor 1,100 Manufacturing overhead 900…

You gave me unhelpful so i am also gave you unhelpful.if you will not give unhelpful then also i will not give unhelpful. what is accoun?

Kling Company was organized in December Year 1 and began operations on January 2, Year 2. Prior to the start of operations, it incurred the following costs: Costs of hiring new employees Attorney's fees in connection with the organization of the company Improvements to leased offices prior to occupancy (10-year lease) Costs of pre-opening advertising Required: 1. What amount should the company expense in Year 1? 600 $3,000 12,000 6,000 5,000 Chapter 12 Homework assignment take frame Start-Up Costs What amount should the company expense in Year 2? +A $

Answer 2

Question

Chapter 3, Problem 1Q

To determine

Describe each of these methods for recording investment, and indicate their advantages and disadvantages.

Expert Solution & Answer

Answer to Problem 1Q

The methods for recording investment are as follows:

Equity method
Initial value method
Partial equity method

Explanation of Solution

Equity method:

The equity method is used when the investor is having the significant influence and the investment balance is reduced by the amount of dividend paid. The method is however best method for accounting of consolidated investments but it is the difficult method to use.

Initial value method:

The dividends are recorded as income under the initial value method. The initial value method differs from the equity method as the dividend is not reduced from the value of the investment.

Partial equity method:

The partial equity method is not that appropriate as the equity method and the fair value method amortizations are accounted under this method.

The partial equity method is however easier than the equity method.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 3

Question

Chapter 3, Problem 1Q

To determine

Describe each of these methods for recording investment, and indicate their advantages and disadvantages.

Expert Solution & Answer

Answer to Problem 1Q

The methods for recording investment are as follows:

Equity method
Initial value method
Partial equity method

Explanation of Solution

Equity method:

The equity method is used when the investor is having the significant influence and the investment balance is reduced by the amount of dividend paid. The method is however best method for accounting of consolidated investments but it is the difficult method to use.

Initial value method:

The dividends are recorded as income under the initial value method. The initial value method differs from the equity method as the dividend is not reduced from the value of the investment.

Partial equity method:

The partial equity method is not that appropriate as the equity method and the fair value method amortizations are accounted under this method.

The partial equity method is however easier than the equity method.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Chapter 3, Problem 1Q

To determine

Describe each of these methods for recording investment, and indicate their advantages and disadvantages.

Expert Solution & Answer

Answer to Problem 1Q

The methods for recording investment are as follows:

Equity method
Initial value method
Partial equity method

Explanation of Solution

Equity method:

The equity method is used when the investor is having the significant influence and the investment balance is reduced by the amount of dividend paid. The method is however best method for accounting of consolidated investments but it is the difficult method to use.

Initial value method:

The dividends are recorded as income under the initial value method. The initial value method differs from the equity method as the dividend is not reduced from the value of the investment.

Partial equity method:

The partial equity method is not that appropriate as the equity method and the fair value method amortizations are accounted under this method.

The partial equity method is however easier than the equity method.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 3, Problem 1Q

To determine

Describe each of these methods for recording investment, and indicate their advantages and disadvantages.

Expert Solution & Answer

Answer to Problem 1Q

The methods for recording investment are as follows:

Equity method
Initial value method
Partial equity method

Explanation of Solution

Equity method:

The equity method is used when the investor is having the significant influence and the investment balance is reduced by the amount of dividend paid. The method is however best method for accounting of consolidated investments but it is the difficult method to use.

Initial value method:

The dividends are recorded as income under the initial value method. The initial value method differs from the equity method as the dividend is not reduced from the value of the investment.

Partial equity method:

The partial equity method is not that appropriate as the equity method and the fair value method amortizations are accounted under this method.

The partial equity method is however easier than the equity method.

Answer 6

Chapter 3, Problem 1Q

To determine

Describe each of these methods for recording investment, and indicate their advantages and disadvantages.

Expert Solution & Answer

Answer to Problem 1Q

The methods for recording investment are as follows:

Equity method
Initial value method
Partial equity method

Explanation of Solution

Equity method:

The equity method is used when the investor is having the significant influence and the investment balance is reduced by the amount of dividend paid. The method is however best method for accounting of consolidated investments but it is the difficult method to use.

Initial value method:

The dividends are recorded as income under the initial value method. The initial value method differs from the equity method as the dividend is not reduced from the value of the investment.

Partial equity method:

The partial equity method is not that appropriate as the equity method and the fair value method amortizations are accounted under this method.

The partial equity method is however easier than the equity method.

Answer 7

Chapter 3, Problem 1Q

To determine

Describe each of these methods for recording investment, and indicate their advantages and disadvantages.

Answer 8

Expert Solution & Answer

Answer to Problem 1Q

The methods for recording investment are as follows:

Equity method
Initial value method
Partial equity method

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

Explanation of Solution

Equity method:

The equity method is used when the investor is having the significant influence and the investment balance is reduced by the amount of dividend paid. The method is however best method for accounting of consolidated investments but it is the difficult method to use.

Initial value method:

The dividends are recorded as income under the initial value method. The initial value method differs from the equity method as the dividend is not reduced from the value of the investment.

Partial equity method:

The partial equity method is not that appropriate as the equity method and the fair value method amortizations are accounted under this method.

The partial equity method is however easier than the equity method.

Answer 12

Ch. 3 - Prob. 1Q Ch. 3 - Prob. 2Q Ch. 3 - Prob. 3Q Ch. 3 - Prob. 4Q Ch. 3 - When a parent company applies the initial value...Ch. 3 - Several years ago, Jenkins Company acquired a...Ch. 3 - Benns adopts the equity method for its 100 percent...Ch. 3 - Prob. 8Q Ch. 3 - Prob. 9Q Ch. 3 - Prob. 10Q

Describe each of these methods for recording investment, and indicate their advantages and disadvantages.

Describe each of these methods for recording investment, and indicate their advantages and disadvantages.

Answer to Problem 1Q

Explanation of Solution

Want to see more full solutions like this?

Chapter 3 Solutions