Equity method: It refers to an accounting technique used by an investor to determine the income earned on investments made in long-term equity securities of a company. Thus, the investor who owns a significant interest by having more than 20%, but less than 50% of ownership, accounts for investments in long-term equity securities under this method. To explain: the recognition of revenue by S Corporation (investor company).

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Chapter AH, Problem 8Q

To determine

Equity method: It refers to an accounting technique used by an investor to determine the income earned on investments made in long-term equity securities of a company. Thus, the investor who owns a significant interest by having more than 20%, but less than 50% of ownership, accounts for investments in long-term equity securities under this method.

To explain: the recognition of revenue by S Corporation (investor company).

To determine

To explain: the recognition of dividends received by S Corporation.

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