A business uses the equity method as an accounting approach to report the earnings made by its investment in some other business. The investor firm declares the revenue generated by another company on its financial statements using the equity methodology in a prorated portion to the equity stake it has in the other organization. The net income of the subsidiary income recognized by the parent company.

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Answer 1

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Chapter 7, Problem 15P

a.

To determine

Introduction: A business uses the equity method as an accounting approach to report the earnings made by its investment in some other business. The investor firm declares the revenue generated by another company on its financial statements using the equity methodology in a prorated portion to the equity stake it has in the other organization.

The net income of the subsidiary income recognized by the parent company.

b)

To determine

Introduction: A business uses the equity method as an accounting approach to report the earnings made by its investment in some other business. The investor firm declares the revenue generated by another company on its financial statements using the equity methodology in a prorated portion to the equity stake it has in the other organization.

The net income attributable to the non-controlling interest for the year 2021.

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Problem No. 2 The trial balance of Cleint Lumanao Nacho Supplies on February 10, 2025, before accepting Shila Tajonera as partner is shown as follows: Account Title Debit Credit Ato Cash reening smuo P 100,000 Accounts Receivable 250,000 Allowance for Uncollectible Accounts P 20,000 o Merchandise Inventory Equipment Accumulated Depreciation Accounts Payable Notes Payable 120,000 275,000 55,000 50,000 82,000 538,000 Lumanao, Capital Total P 745,000 P 745,000 Tajonera offered to invest cash to get a capital credit equal to one-half of Lumanao's capital after giving effect to the adjustments below. Lumanao accepted the offer. Valuation of some of the assets and liabilities of Lumanao, as agreed by the partners, are the following: • The merchandise is to be valued at P93,000. The accounts receivable is estimated to be 90% collectible. • The equipment is to be valued at P200,000. The partners also agreed that the name of the partnership will be Nacho Business. Required: 1. In the books of…

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Answer 2

Question

Chapter 7, Problem 15P

a.

To determine

Introduction: A business uses the equity method as an accounting approach to report the earnings made by its investment in some other business. The investor firm declares the revenue generated by another company on its financial statements using the equity methodology in a prorated portion to the equity stake it has in the other organization.

The net income of the subsidiary income recognized by the parent company.

b)

To determine

Introduction: A business uses the equity method as an accounting approach to report the earnings made by its investment in some other business. The investor firm declares the revenue generated by another company on its financial statements using the equity methodology in a prorated portion to the equity stake it has in the other organization.

The net income attributable to the non-controlling interest for the year 2021.

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Answer 3

Question

Chapter 7, Problem 15P

a.

To determine

Introduction: A business uses the equity method as an accounting approach to report the earnings made by its investment in some other business. The investor firm declares the revenue generated by another company on its financial statements using the equity methodology in a prorated portion to the equity stake it has in the other organization.

The net income of the subsidiary income recognized by the parent company.

b)

To determine

Introduction: A business uses the equity method as an accounting approach to report the earnings made by its investment in some other business. The investor firm declares the revenue generated by another company on its financial statements using the equity methodology in a prorated portion to the equity stake it has in the other organization.

The net income attributable to the non-controlling interest for the year 2021.

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Answer 4

Question

Chapter 7, Problem 15P

a.

To determine

Introduction: A business uses the equity method as an accounting approach to report the earnings made by its investment in some other business. The investor firm declares the revenue generated by another company on its financial statements using the equity methodology in a prorated portion to the equity stake it has in the other organization.

The net income of the subsidiary income recognized by the parent company.

b)

To determine

Introduction: A business uses the equity method as an accounting approach to report the earnings made by its investment in some other business. The investor firm declares the revenue generated by another company on its financial statements using the equity methodology in a prorated portion to the equity stake it has in the other organization.

The net income attributable to the non-controlling interest for the year 2021.

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Answer 5

Chapter 7, Problem 15P

a.

To determine

Introduction: A business uses the equity method as an accounting approach to report the earnings made by its investment in some other business. The investor firm declares the revenue generated by another company on its financial statements using the equity methodology in a prorated portion to the equity stake it has in the other organization.

The net income of the subsidiary income recognized by the parent company.

b)

To determine

Introduction: A business uses the equity method as an accounting approach to report the earnings made by its investment in some other business. The investor firm declares the revenue generated by another company on its financial statements using the equity methodology in a prorated portion to the equity stake it has in the other organization.

The net income attributable to the non-controlling interest for the year 2021.

Answer 6

Chapter 7, Problem 15P

a.

To determine

Introduction: A business uses the equity method as an accounting approach to report the earnings made by its investment in some other business. The investor firm declares the revenue generated by another company on its financial statements using the equity methodology in a prorated portion to the equity stake it has in the other organization.

The net income of the subsidiary income recognized by the parent company.

Answer 7

Chapter 7, Problem 15P

a.

To determine

Introduction: A business uses the equity method as an accounting approach to report the earnings made by its investment in some other business. The investor firm declares the revenue generated by another company on its financial statements using the equity methodology in a prorated portion to the equity stake it has in the other organization.

The net income of the subsidiary income recognized by the parent company.

Answer 8

b)

To determine

Introduction: A business uses the equity method as an accounting approach to report the earnings made by its investment in some other business. The investor firm declares the revenue generated by another company on its financial statements using the equity methodology in a prorated portion to the equity stake it has in the other organization.

The net income attributable to the non-controlling interest for the year 2021.

Answer 9

b)

To determine

Introduction: A business uses the equity method as an accounting approach to report the earnings made by its investment in some other business. The investor firm declares the revenue generated by another company on its financial statements using the equity methodology in a prorated portion to the equity stake it has in the other organization.

The net income attributable to the non-controlling interest for the year 2021.

Answer 10

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Answer 11

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Answer 12

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Answer 13

Ch. 7 - Prob. 1Q Ch. 7 - Prob. 2Q Ch. 7 - Prob. 3Q Ch. 7 - How does the presence of an indirect ownership...Ch. 7 - Prob. 5Q Ch. 7 - In accounting for mutual ownerships, what is the...Ch. 7 - Prob. 7Q Ch. 7 - Prob. 8Q Ch. 7 - Prob. 9Q Ch. 7 - Prob. 10Q

Solution Summary: The author explains how a business uses the equity method to report the earnings made by its investment in some other business.

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