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 Record: The transactions for equity on net income of investee recognized by investor.

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Answer 1

Question

Chapter AH, Problem H.4E

a)

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 Record: The transactions for equity on net income of investee recognized by investor.

(b)

To determine

To Compute: The balance amount of Stock Investments in Corporation S as at December 31.

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Annapolis Company manufactures quality boating apparel. The following selected financial information for the fiscal year 2018 is provided: Item Sales Beginning Raw Material Inventory Direct Material Purchased Factory Overhead Finished Goods Inventory - January 1 Work in Process - January 1 Work in Process - December 31 Ending Raw Material Inventory Finished Goods Inventory - December 31 Net Income Direct Labor Cost of Goods Sold Amount $ 8,50,000 $ $ 74,000 $ 3,08,000 $ 90,000 $ 1,44,000 $ 74,000 $ 98,000 $ 58,000 $ 1,68,000 $65,000 $ 1,55,000 $ 6,55,000 Use this information to prepare a detailed Schedule of Costs of Goods Manufactured for FY 2018.

Answer 2

Question

Chapter AH, Problem H.4E

a)

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 Record: The transactions for equity on net income of investee recognized by investor.

(b)

To determine

To Compute: The balance amount of Stock Investments in Corporation S as at December 31.

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Answer 3

Question

Chapter AH, Problem H.4E

a)

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 Record: The transactions for equity on net income of investee recognized by investor.

(b)

To determine

To Compute: The balance amount of Stock Investments in Corporation S as at December 31.

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Answer 4

Question

Chapter AH, Problem H.4E

a)

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 Record: The transactions for equity on net income of investee recognized by investor.

(b)

To determine

To Compute: The balance amount of Stock Investments in Corporation S as at December 31.

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Answer 5

Chapter AH, Problem H.4E

a)

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 Record: The transactions for equity on net income of investee recognized by investor.

(b)

To determine

To Compute: The balance amount of Stock Investments in Corporation S as at December 31.

Answer 6

Chapter AH, Problem H.4E

a)

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 Record: The transactions for equity on net income of investee recognized by investor.

Answer 7

Chapter AH, Problem H.4E

a)

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 Record: The transactions for equity on net income of investee recognized by investor.

Answer 8

(b)

To determine

To Compute: The balance amount of Stock Investments in Corporation S as at December 31.

Answer 9

(b)

To determine

To Compute: The balance amount of Stock Investments in Corporation S as at December 31.

Answer 10

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Answer 11

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Answer 12

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Answer 13

Ch. AH - Prob. 1Q Ch. AH - Prob. 2Q Ch. AH - Prob. 3Q Ch. AH - Prob. 4Q Ch. AH - What is the cost of an investment in stock?Ch. AH - Prob. 6Q Ch. AH - Prob. 7Q Ch. AH - Prob. 8Q Ch. AH - Prob. 9Q Ch. AH - Distinguish between the cost and equity methods of...

Solution Summary: The author explains the equity method used by an investor to determine the income earned on investments in long-term equity securities of a company.

Concept explainers

To Compute: The balance amount of Stock Investments in Corporation S as at December 31.

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Chapter AH Solutions