Question

Equity accounting for intercorporate investment relies on book value. But if the ownership is an investment, how does fair value accounting enter in? Should it be considered at all?

Expert Answer

1 Rating

Want to see the step-by-step answer?

Check out a sample Q&A here.

Want to see this answer and more?

Experts are waiting 24/7 to provide step-by-step solutions in as fast as 30 minutes!*

*Response times may vary by subject and question complexity. Median response time is 34 minutes for paid subscribers and may be longer for promotional offers.
Tagged in
Business
Accounting

Related Accounting Q&A

Find answers to questions asked by students like you.

Q: Once § 1231 gains are netted against § 1231 losses, if the gains exceed the losses, the net gain is ...

A: Internal Revenue Code (IRC):  Internal Revenue Code is generally referred to as “The CODE” outlines ...

Q: I'm having trouble finding the value for the inventory balance as of january 31st for the cost of fi...

A: Finished goods inventory are completely ready for sale after completing the manufacturing process.

Q: HM company has 1,000,000 shares of $1 par value capital stock outstanding on January 1. The followin...

A: (1) Journal entries for the given transactions are as follows:  

Q: The Walton Toy Company manufactures a line of dolls and a doll dress sewing kit. Demand for the doll...

A: 1.Calculate the contribution margin per direct labor-hour expended on each product.

Q: Vale, Hamilton and Curtis, Inc. (VHC) (this is the same company in I above) began operations on June...

A: Computation of Taxable Income of VHC Inc,. for 2018

Q: What are some examples of such exclusions in gross income?

A: Gross Income: For individual: Gross income includes the income of an individual in the form of wages...

Q: Brief Exercise 15-8Marin Inc. has outstanding 10,400 shares of $10 par value common stock. On July 1...

A: Preparation of the journal entries to record the repurchased the outstanding shares as on July 1, 20...

Q: Hello, A task force of capital budgeting analysts at Morrison Ltd., collected the following data con...

A: The Net Present Value of the project has to be determined by deducting the present values of all inf...

Q: Guenter and Firmin both of whom are CPAs, form a partnership with Guenter investing $100,00 and firm...

A: A general partnership is an agreement in which two or more partners agree to share the profits and l...

Q: Many businesses borrow money during periods of increased business activity to finance inventory and ...

A: Calculating the value of interest on the note payable at due date. We have,The value of interest = A...

Q: I need help with the two I got wrong which are highlighted in red.

A: Vertical analysis is generally done to express the relative sizes of the different accounts reported...

Q: 11.4Calculate financial leverage measures The following information was available for the year ended...

A: Calculate the debt ratio.

Q: Every year Blue Industries manufactures 7,300 units of part 231 for use in its production cycle. The...

A: Relevant costs: These are the costs a business computes to decide whether to continue or close a uni...

Q: Can you explain the solution below ? how did they calculate the sales revenue ? It doesn't make sens...

A: This budget can be understood in the following manner :

Q: Gallatin Carpet Cleaning is a small, family-owned business operating out of Bozeman, Montana. For it...

A: Activity-based costing (ABC): The costing method which allocates overheads to the products based on ...

Q: What prevents you from deleting the record of the vendor list? This from quitbooks.

A: Quick books has  system of accounting control  where in all users do not have access to updating mas...

Q: Okay, I have everything else in the journal entry except for the last one.  I'm attaching a picture ...

A: Discount on notes receivable: A contra asset account arising when the present value of a note receiv...

Q: a. A new operating system for an existing machine is expected to cost $520,000 and have a useful lif...

A: We need to add back annual depreciation to after tac profits, so that we are able to determine the c...

Q: Problem 25-3A Computation of cash flows and net present values with alternative depreciation methods...

A: Net present value method: Net present value method is the method which is used to compare the initia...

Q: Role of Accounting

A: Accounting: Accounting is a process of collecting and organizing financial transactions, analyzing, ...

Q: Suppose your company sells services of $260 in exchange for $175 cash and $85 on account. Depreciati...

A: Journal entry: The record of business transactions in a chronological order in the journal using deb...

Q: The adjusted basis of an asset is the original cost (or basis) plus capital recoveries less capital ...

A: Adjusted basis: The amount of original cost, plus additional investments (capital expenditure) and r...

Q: Ramos Co. provides the following sales forecast and production budget for the next four months:  ...

A: Budget:Budget refers to the financial plan for the business activities a company intends to do in th...

Q: I need help with questions 4/5/6A   Lou Barlow, a divisional manager for Sage Company, has an opport...

A: 4. Profitability index is measured by dividing the present value of the future cash flows by the ini...

Q: Brief Exercise 15-10Sweet Inc. declared a cash dividend of $2.2 per share on its 5 million outstandi...

A: Journal: Journal is the method of recording monetary business transactions in chronological order. I...

Q: Are the answers correct?

A: 9.Variable overhead rate variance: The difference between the actual variable overhead rate and stan...

Q: On December 31, 2016, Cullumber Company had 1,385,000 shares of $6 par common stock issued and outst...

A: Calculate the values related to preferred stock account that would appear on the stockholders\\\' eq...

Q: Ted earned $150,000 during the current year. He paid Alice, his former wife, $75,000 in alimony. The...

A: Alimony:Alimony is a fixed amount of money wherein, the court orders a person to make payment for hi...

Q: Lightning Electronics is a midsize manufacturer of lithium batteries. The company’s payroll records ...

A: An organization's payroll costs not just incorporate the wages paid to the representatives. In the U...

Q: Clem and Chloe, a married couple, sell their principal residence that they have owned and occupied f...

A: Disposal of Assets: Disposal is an activity of selling the worn-out assets that is no longer in need...

Q: The following information was drawn from the Year 5 balance sheets of two companies:  Company Ass...

A: Return on equity ratio:  Rate of return on equity ratio is used to determine the relationship betwee...

Q: Angie Silva has recently opened The Sandal Shop in Brisbane, Australia, a store that specializes in ...

A: Part 1. Break-even point represents that point of sales at which total cost incurred by a company is...

Q: Flounder Windows manufactures and sells custom storm windows for three-season porches. Flounder also...

A: Revenue Recognition: As per the revenue recognition concept of accounting, the revenue of the busine...

Q: Tempo Company’s fixed budget (based on sales of 7,000 units) for the first quarter of calendar year ...

A: Calculate the sales price per unit.

Q: Angie Silva has recently opened The Sandal Shop in Brisbane, Australia, a store that specializes in ...

A: Break-even point: Break-even point of sales is that level of sales at which the firm is neither earn...

Q: what are the differences between the following components of taxable income                   o   De...

A: Difference between the Deductions for AGI and Deductions from AGI: Deductions for AGI are also refer...

Q: LO 3,8 Citron, a calendar year taxpayer, began business in January 2017. It had a long-term capital ...

A: Provision of long-term capital gain as an individual. Long-term capital gain of $5,000 in 2017 is ta...

Q: The following expenditures relating to plant assets were made by Glenn Company during the first 2 mo...

A: Expenditures: The useful life of the plant assets signifies the time period, that the company estima...

Q: 12.4 analysis    CVP analysis Current operating income for Bay Area Cycles Co. is $70,000. Selling p...

A: Calculate Company B’s breakeven point in units.

Q: Hello, Cowboy recording studio is considering the investment of $142,700 in a new recording equipmen...

A: Step  1:Calculation of the present value factor of annuity:Note:  while calculating the present valu...

Q: Referring to the question E2-26A in the textbook named Managerial Accounting by Pearson- 5th edition...

A: Expenses: Expenses are costs incurred for the operations of a business. The costs incurred for gener...

Q: Brief Exercise 15-11Indigo Inc. owns shares of Sweet Corporation stock. At December 31, 2017, the se...

A: Preparation of journal entries to record unrealized holding gain or loss as on September 21, 2018. W...

Q: At December 31, 2018, Burr AG owes €500,000 on a note payable due February 2019. (a) If Burr intends...

A: Current liability: Current liability is an obligation that the companies need to pay from the remain...

Q: Evan and Eileen Carter are husband and wife and file a joint return for 2018. Both are under 65 year...

A: Dependency exemption: The deduction allowed for the care and maintenance of qualifying dependent is ...

Q: Problem 25-3A Computation of cash flows and net present values with alternative depreciation methods...

A: The Taxable Income needs to be calculated by subtracting the depreciation from  Pretax income. Once ...

Q: In October 2018, Ben and Jerry exchange investment realty in a § 1031 like-kind exchange. Ben bought...

A: The holding period for Ben's reality received from Jerry begin from 2007 because the holding period ...

Q: Global Marine obtained a charter from the state in January that authorized 1,000,000 shares of commo...

A: 1. The stock has been issued at $60. Given par value is $5. SO, excess paid in capital =$60-$5= $552...

Q: Waterways Corporation is preparing its budget for the coming year, 2020. The first step is to plan f...

A: Click to see the answer

Q: FB Manufacturing Company is a partnership among Yolando Gonzalez, Willies Todd, and Linda Walkers. T...

A: Partnership: A partnership is that type of business in which two or more person share loss and profi...

Q: Shown below are comparative balance sheets for Sandhill Company. Sandhill CompanyComparative Bal...

A: Cash Flow Statements Cash flow statement provides information regarding cash generated or used durin...