Equity Method of valuation of investment: In this method, parent company value investment at the historical cost of the investment plus apportioned profit less dividend paid by the subsidiary company. To Prepare: Journal entry to value the Investment at equity method.

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Chapter 4, Problem 4.3E

To determine

Concept Introduction:

Equity Method of valuation of investment: In this method, parent company value investment at the historical cost of the investment plus apportioned profit less dividend paid by the subsidiary company.

To Prepare: Journal entry to value the Investment at equity method.

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L.L. Bean operates two factories that produce its popular Bean boots (also known as "duck boots") in its home state of Maine. Since L.L. Bean prides itself on manufacturing its boots in Maine and not outsourcing, backorders for its boots can be high. In 2014, L.L. Bean sold about 450,000 pairs of the boots. At one point during 2014, it had a backorder level of about 100,000 pairs of boots. L.L. Bean can manufacture about 2,200 pairs of its duck boots each day with its factories running 24/7. In 2015, L.L. Bean expects to sell more than 500,000 pairs of its duck boots. As of late November 2015, the backorder quantity for Bean Boots was estimated to be about 50,000 pairs. Question: 1. Assume that 5% of the L.L. Bean boots are returned by customers for various reasons. L. Bean has a 100% refund policy for returns, no matter what the reason. What would the journal entry be to accrue L.L. Bean's sales returns for this one pair of boots? (Note: L.L. Bean most likely will make…

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Answer 2

Question

Chapter 4, Problem 4.3E

To determine

Concept Introduction:

Equity Method of valuation of investment: In this method, parent company value investment at the historical cost of the investment plus apportioned profit less dividend paid by the subsidiary company.

To Prepare: Journal entry to value the Investment at equity method.

Expert Solution & Answer

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Answer 3

Question

Chapter 4, Problem 4.3E

To determine

Concept Introduction:

Equity Method of valuation of investment: In this method, parent company value investment at the historical cost of the investment plus apportioned profit less dividend paid by the subsidiary company.

To Prepare: Journal entry to value the Investment at equity method.

Expert Solution & Answer

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Answer 4

Question

Chapter 4, Problem 4.3E

To determine

Concept Introduction:

Equity Method of valuation of investment: In this method, parent company value investment at the historical cost of the investment plus apportioned profit less dividend paid by the subsidiary company.

To Prepare: Journal entry to value the Investment at equity method.

Expert Solution & Answer

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Answer 5

Chapter 4, Problem 4.3E

To determine

Concept Introduction:

Equity Method of valuation of investment: In this method, parent company value investment at the historical cost of the investment plus apportioned profit less dividend paid by the subsidiary company.

To Prepare: Journal entry to value the Investment at equity method.

Answer 6

Chapter 4, Problem 4.3E

To determine

Concept Introduction:

Equity Method of valuation of investment: In this method, parent company value investment at the historical cost of the investment plus apportioned profit less dividend paid by the subsidiary company.

To Prepare: Journal entry to value the Investment at equity method.

Answer 7

Chapter 4, Problem 4.3E

To determine

Concept Introduction:

Equity Method of valuation of investment: In this method, parent company value investment at the historical cost of the investment plus apportioned profit less dividend paid by the subsidiary company.

To Prepare: Journal entry to value the Investment at equity method.

Answer 8

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Answer 9

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Answer 10

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Answer 11

Ch. 4 - When is the carrying value of the investment...Ch. 4 - What is a differential? How is a differential...Ch. 4 - Prob. 4.3Q Ch. 4 - Prob. 4.4Q Ch. 4 - Prob. 4.5Q Ch. 4 - Prob. 4.6Q Ch. 4 - Prob. 4.7Q Ch. 4 - Prob. 4.8Q Ch. 4 - Prob. 4.9Q Ch. 4 - Prob. 4.10Q

Equity Method of valuation of investment: In this method, parent company value investment at the historical cost of the investment plus apportioned profit less dividend paid by the subsidiary company. To Prepare: Journal entry to value the Investment at equity method.

Solution Summary: The author explains the equity method of valuation of investment: parent company value investment at the historical cost of the investment plus apportioned profit less dividend paid by subsidiary company.

Concept explainers

Concept Introduction:

Equity Method of valuation of investment: In this method, parent company value investment at the historical cost of the investment plus apportioned profit less dividend paid by the subsidiary company.

To Prepare: Journal entry to value the Investment at equity method.

Want to see the full answer?

Chapter 4 Solutions

Equity Method of valuation of investment: In this method, parent company value investment at the historical cost of the investment plus apportioned profit less dividend paid by the subsidiary company. To Prepare: Journal entry to value the Investment at equity method.

Solution Summary: The author explains the equity method of valuation of investment: parent company value investment at the historical cost of the investment plus apportioned profit less dividend paid by subsidiary company.

Concept explainers

Concept Introduction: Equity Method of valuation of investment: In this method, parent company value investment at the historical cost of the investment plus apportioned profit less dividend paid by the subsidiary company. To Prepare: Journal entry to value the Investment at equity method.

Want to see the full answer?

Chapter 4 Solutions

Concept Introduction:

Equity Method of valuation of investment: In this method, parent company value investment at the historical cost of the investment plus apportioned profit less dividend paid by the subsidiary company.

To Prepare: Journal entry to value the Investment at equity method.