Please concisely explain how the excess investment cost over book value is allocated. When is the intra-entity’s profits recognized on transfers between the investor and investee? What is the controlling interest percentage for a consolidated accounting financial statement?

Please concisely explain how the excess investment cost over book value is allocated. When is the intra-entity’s profits recognized on transfers between the investor and investee? What is the controlling interest percentage for a consolidated accounting financial statement?

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter10: Stockholder's Equity

Section: Chapter Questions

Problem 22MCQ: Comprehensive income: includes transactions that affect stockholders equity with the exception of...

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Please concisely explain how the excess investment cost over book value is allocated.
When is the intra-entity’s profits recognized on transfers between the investor and investee?
What is the controlling interest percentage for a consolidated accounting financial statement?

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Comprehensive income: includes transactions that affect stockholders equity with the exception of those transactions that involve owners. is considered an appropriation of retained earnings. includes all transactions that are under managements control. is the result of all events and transactions reported on the income statement.
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An appropriation of accumulated profits for possible contingencies should be a. Transferred to income as losses are realized b. Shown within shareholders’ equity in the statement of financial position c. Charged with all losses related to that contingency d. Classified in the liability section of the statement of financial position
When an investor uses the cost method to account for investments in subsidiary, cash dividends received by the investor from the investee should normally be recorded as: A. Ignored. B. Dividend income. C. An addition to the investor’s share of the investee’s profit. D. A deduction from the investment account E. A deduction from the investor’s share of the investee’s profit.
If the entity is using the equity method to account for investment in subsidiary, the entry to recognize dividends received from the subsidiary will: a.Be recognized in profit or loss b.Increase the carrying amount of investment c.Decrease the carrying amount of investment d.Be recognized in other comprehensive income