INTERMEDIATE ACCOUNTING
8th Edition
ISBN: 9780078025839
Author: J. David Spiceland
Publisher: McGraw-Hill Education
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Question
Chapter 12, Problem 12.19Q
To determine
Equity method: Equity method is the accounting method used for accounting equity investments which claim a significant influence of above 20% but less than 50% in the outstanding stock of the investee company.
To indicate: The effect of change of equity method to another method on the investment account
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Sometimes an investor’s level of influence changes, making it necessary to change from the equity method to another method. How should the investor account for this change in accounting method?
The information on the statement of changes in owners equity is used in preparing the income statement.
True or false?
Which of the following is not a component of the statement of changes in equity? *Comprehensive income for the periodEffect of changes in accounting policies and correction of prior period errorsOperating, investing and financing activities of the firmTransactions with owners in their capacity as owners showing separately contributions by and distributions to owners
Chapter 12 Solutions
INTERMEDIATE ACCOUNTING
Ch. 12 - Prob. 12.1QCh. 12 - When market rates of interest rise after a...Ch. 12 - Does GAAP distinguish between fair values that are...Ch. 12 - When a debt investment is acquired to be held for...Ch. 12 - Prob. 12.5QCh. 12 - What is comprehensive income? Its composition...Ch. 12 - Why are holding gains and losses treated...Ch. 12 - Prob. 12.8QCh. 12 - Prob. 12.9QCh. 12 - Prob. 12.10Q
Ch. 12 - Prob. 12.11QCh. 12 - Prob. 12.12QCh. 12 - Do U.S. GAAP and IFRS differ in the amount of...Ch. 12 - Under what circumstances is the equity method used...Ch. 12 - The equity method has been referred to as a...Ch. 12 - In the application of the equity method, how...Ch. 12 - Prob. 12.17QCh. 12 - Prob. 12.18QCh. 12 - Prob. 12.19QCh. 12 - How does IFRS differ from U.S. GAAP with respect...Ch. 12 - What is the effect of a company electing the fair...Ch. 12 - Define a financial instrument. Provide three...Ch. 12 - Some financial instruments are called derivatives....Ch. 12 - Prob. 12.24QCh. 12 - Prob. 12.25QCh. 12 - Prob. 12.26QCh. 12 - (Based on Appendix 12B) Reporting an investment at...Ch. 12 - Prob. 12.28QCh. 12 - Explain how the CECL model (introduced in ASU No....Ch. 12 - Prob. 12.1BECh. 12 - Prob. 12.2BECh. 12 - Available -for-sale securities LO12-4 SL...Ch. 12 - Prob. 12.4BECh. 12 - Prob. 12.5BECh. 12 - Prob. 12.6BECh. 12 - Prob. 12.7BECh. 12 - Prob. 12.8BECh. 12 - Prob. 12.9BECh. 12 - Prob. 12.10BECh. 12 - Prob. 12.11BECh. 12 - Prob. 12.12BECh. 12 - Prob. 12.13BECh. 12 - Prob. 12.14BECh. 12 - Prob. 12.15BECh. 12 - Prob. 12.16BECh. 12 - Prob. 12.17BECh. 12 - Prob. 12.18BECh. 12 - Prob. 12.1ECh. 12 - Prob. 12.2ECh. 12 - Prob. 12.3ECh. 12 - Prob. 12.4ECh. 12 - Prob. 12.5ECh. 12 - Prob. 12.6ECh. 12 - Prob. 12.7ECh. 12 - Prob. 12.8ECh. 12 - Prob. 12.9ECh. 12 - Prob. 12.10ECh. 12 - Prob. 12.11ECh. 12 - Prob. 12.12ECh. 12 - Prob. 12.13ECh. 12 - Prob. 12.14ECh. 12 - Prob. 12.15ECh. 12 - Prob. 12.16ECh. 12 - Prob. 12.17ECh. 12 - Prob. 12.18ECh. 12 - Prob. 12.19ECh. 12 - Prob. 12.20ECh. 12 - Prob. 12.21ECh. 12 - Prob. 12.22ECh. 12 - Prob. 12.23ECh. 12 - Prob. 12.24ECh. 12 - Prob. 12.25ECh. 12 - Prob. 12.26ECh. 12 - Prob. 12.27ECh. 12 - Prob. 12.28ECh. 12 - Prob. 12.29ECh. 12 - Prob. 12.30ECh. 12 - Prob. 12.31ECh. 12 - Prob. 1CPACh. 12 - Prob. 2CPACh. 12 - Prob. 3CPACh. 12 - Prob. 4CPACh. 12 - Prob. 5CPACh. 12 - Prob. 6CPACh. 12 - Prob. 7CPACh. 12 - Prob. 8CPACh. 12 - Prob. 9CPACh. 12 - Prob. 10CPACh. 12 - Prob. 11CPACh. 12 - Prob. 12CPACh. 12 - Prob. 13CPACh. 12 - Prob. 1CMACh. 12 - Prob. 2CMACh. 12 - Prob. 3CMACh. 12 - Prob. 12.1PCh. 12 - Prob. 12.2PCh. 12 - Prob. 12.3PCh. 12 - Prob. 12.4PCh. 12 - Prob. 12.5PCh. 12 - Prob. 12.6PCh. 12 - Prob. 12.7PCh. 12 - Prob. 12.8PCh. 12 - Prob. 12.9PCh. 12 - Prob. 12.10PCh. 12 - Prob. 12.11PCh. 12 - Prob. 12.12PCh. 12 - Prob. 12.13PCh. 12 - P 12–14
Classifying investments
LO12–1 through...Ch. 12 - Prob. 12.15PCh. 12 - Prob. 12.16PCh. 12 - Prob. 12.17PCh. 12 - Prob. 12.18PCh. 12 - Prob. 12.1BYPCh. 12 - Prob. 12.2BYPCh. 12 - Case 12–4
Accounting for debt and equity...Ch. 12 - Prob. 12.6BYPCh. 12 - Prob. 12.7BYP
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Similar questions
- What is the impact on the accounting equation when stock is issued, in exchange for assets? A. both sides increase B. both sides decrease C. only the Asset side changes D. neither side changesarrow_forwardWhat are the effects of the following transactions on the accounting equation? Indicate an increase (+) or decrease () under the affected asset, liability, and owners equity headings.arrow_forwardThe balance sheet is prepared before the statement of changes in owners equity. True or false?arrow_forward
- In the current financial environment, what characteristic of accounting date (timeliness, completeness, accuracy) do you feel is the most important for external investorsarrow_forwardHow would a debit balance in Unrealized Gain (Loss) on Available-for-Sale Investments be reported in the financial statements? Is it better to have an unrealized or realized gain and what are the effects on your bottom line? Also, how are the balance sheet and income statement affected by fair value accounting?arrow_forwardWhich of the following statements concerning the debit-credit feature of the accounting equation is CORRECT? A debit entry will decrease a liability account and increase an asset account Debits is entered on the right and credit are entered on the left liability account should be credited upon payment of an account payable. Stock sold to investors increases stockholders' equity and is recorded as a debitarrow_forward
- What is the role of accounting theory in addressing the needs of different stakeholders, such as investors, creditors, regulators, and the general public?arrow_forwardWhat role do investors play as stakeholders in accounting and financial analysis?arrow_forwardWhat uses of financial accounting information are made by (a) investors and (b) creditors?arrow_forward
- Under standard accounting rules, it is possible for a company’s liabilities to exceed its assets. When this occurs,the owners’ equity is negative. Can this happen with market values? Why or why not?arrow_forwardSuzanne knows that an increase to an expense reduces retained earnings (a stockholders’ equity account). However, she also knows that expense accounts have a debit balance, while retained earnings normally has a credit balance. Are these two pieces of information consistent? Explain.arrow_forwardWhen an investor has significant influence over an investee, the investor must use the equity method of accounting to recognise the investee in its consolidated financial statements. Select one: True Falsearrow_forward
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