Course Project

1. When an investor uses the equity method to account for coronations in common stock, capital dividends received by the investor from the investee should be put down as (D); A deduction from the investment account (AICPA adapted). 2. Sisk Company has owned 10% of Maust, Inc., for the past several years. This ownership did not all toldow Sisk to clean-cut crucial influence oer Maust. Recently, Sisk acquired an additional 30% of Maust and instanter ordain use the equity method. How will the investor report the flip-flop? (C); A retrospective adjustment is made to restate all prior(prenominal) years using the equity method. 3. In January 2008, Wilkinson, Inc., acquired 20% of the p all(prenominal)y common stock of Bremm, Inc., for $700,000. This investment gave Wilkinson the ability to calculate significant influence over Bremm. Bremms assets on that realise were recorded at $3,900,000 with liabilities of $900,000. Any excess of cost over accommodate value of the investment was attributed to a patent having a remain useful life of 10 years. In 2008,, Bremm report give the sack income of $170,000. In 2009, Bremm reported net income of $210,000. Dividends of $70,000 were paid in each of these two years. What is the equity method balance of Wilkinsons investment in Bremm, Inc, at December 31, 2009?

A $728,000 issue by Invested 700,000 Income 2007 170,000 x 20% 34,000 2008 210,000 x 20% ! 42,000 Amortization 2007 (10,000) 2008 (10,000) Dividends 2007 70,000 x 20% (14,000) 2008 (14,000) Equity method balance...If you want to get a full essay, order it on our website: BestEssayCheap.com

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