Under what circumstances is the equity method used to account for an investment in stock?

Q: why does the value of a share of stock depend on dividends?

A: Dividend on stocks: Dividend is the proportion of profit that the company distributes among its…

Q: When an investor uses the equity method to account for investments in common stock, cash dividend…

A: 1. Equity method - Under an Equity method of accounting following entries and changes are made every…

Q: How does the purchase of treasury stock affect the purchaser’s assets and total equity?

A: Treasury stock: It can be defined as the stock that is repurchased or bought back by the issuing…

Q: Describe the accounting entry for a stock dividend, if any.Describe the accounting entry for a stock…

A: Stock dividend declaration has two type. Declaration of stock dividend more than 30% represents…

Q: Describe the possible forms in which a return could be received for bonds, common stock, and…

A: Financial Assets refers to the assets which can be acquired for investment and also be liquidated…

Q: How the dividend is related to the market value of shares? [A] interest coverage ratio [B] fixed…

A:

Q: In accounting for mutual ownerships, what is the treasury stock approach?

A:

Q: How would you describe a change that a company makes from the equity method to the fair-value method…

A: Definition:   Equity method: Equity method is the method used for accounting equity investments…

Q: When common stock is issued at an amount greater than par value, the difference between the par…

A: When common stock is issued for more than its par value, the difference between par value and…

Q: What is the difference between stock split and stock dividends.

A:

Q: For fi nancial assets classifi ed as trading securities, how are unrealized gains and losses refl…

A: Financial assets classified as trading securities can be defined as the assets which can be realized…

Q: What are the different bases for stock valuation when assetsother than cash are received for issued…

A: Definition:

Q: What account is used to record the premium when issuing common stock? What type of account is this?

A: Determine the account used to record the premium when issuing common stock.The issue of common stock…

Q: Hiram Co. uses the equity method to account for investments in common stock. What accounting should…

A: Investments:   Companies invest in stocks and bonds of other companies or governmental entity to…

Q: On a balance sheet, what valuation must be reported for short-term debt investments in trading…

A: Short term debt investments are those debt funds or mutual funds that are obtained for a short…

Q: whats the stockholder equity for this

A:

Q: What is stock receipt? What consideration should be taken in the stock receipt?

A: Receipts are a legal document that serves as documentation of a financial transaction or purchase.…

Q: Where can authoritative IFRS be found related to dilutive securities, stock-based compensation, and…

A:

Q: Choose the correct.When an investor uses the equity method to account for investments in common…

A: When an investor uses the equity method to account for investments in common stock, the investor’s…

Q: How does authorized stock differ from outstanding stock?

A: Outstanding stock: The total number of shares that are authorized and issued by a public company,…

Q: Which one of the following is referred as Equity finance? O a. Sale of money market instruments O b.…

A: Equity refers to the amount which is being invested or owned by shareholders means the owner of the…

Q: Differentiate between the stock dividend and stock split and their effects on the stock prices.

A: Stock Dividend: It is a form of equity dividend paid to the shareholders by the company. Stock…

Q: Discuss the propriety of showing:(a) Treasury stock as an asset.(b) “Gain” or “loss” on sale of…

A: (a)

Q: What is the difference between shares and bonds from the perspective of an investor

A: Institutional investors are high net worth institutions who invest in stocks for the purpose of…

Q: What information is presented in a statement of stockholders’ equity?

A: Explain the information that is presented in a statement of stockholders’ equity:

Q: Describe in general the various methods of accounting for an investment in equity shares of another…

A:

Q: When is the equity method used when purchasing another company's stock? How is it recorded?

A: Companies with huge cash balance tend to purchase another company's stock to excercise significant…

Q: explain the differences between equity capital and debt capital. which category would stocks fall…

A: Capital is the requirement of the business. As per requirement of short term or long term…

Q: Which of the following is not a method that may be used to account for treasury shares? a. Cost…

A: The treasury shares are the shares which are reacquired by the issuing company from the…

Q: . Unrealized gains and losses on investments in trading securities are reported a. as a current…

A: Trading securities are securities that can be sold immediately in the open market. These securities…

Q: What is an asset allocation in investing equity securities?

A: Asset allocation means the investment portfolio is splitted based on the asset categories like…

Q: Who actually owns stock, how is the price of common stock based and how is the price of bonds

A: When company issues the stock of company in the market they are bought by all interested…

Q: Under what circumstances do we use the equity method to account for an investment in stock?

A: The equity method seems to be an accounting methodology that a firm uses to recognize profits gained…