Generally Accepted Accounting Principles (GAAP):
They are commonly known as GAAP. It is a collection of generally practiced and followed rules and standards of accounting. GAAP provides global guidelines for preparation and disclosure of financial statements of public companies. It is created and developed by International Accounting Standards Board (IASB).
International Financial Reporting Standards (IFRS):
It is a collection of generally practiced and followed rules and standards of accounting. GAAP provides global guidelines for preparation and disclosure of financial statements of public companies. It is created and developed by International Accounting Standards Board (IASB).
To examine: The differences between
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Financial & Managerial Accounting
- William accounts for its investment in Baker Company under the equity method. William carried the Baker investment at $150,550 and $165,350 at December 31, 2020, and December 31, 2021, respectively. During 2021 Baker recognized $75,100 of net income and paid dividends of $20,350. Assuming that William owned the same percentage of Baker throughout 2021, its percentage ownership must have been: (Round your answer to the nearest whole percent):arrow_forwardWhen an investor owns between 20% and 50% of outstanding stock of another company and has significant influence the method is used to account for stock investmentsarrow_forwardA decedent invested in the stocks of ABC Corporation by Purchasing stocks from an investor who sold the shares at P 125 per share. At the date of the decedent's death, the stocks were selling P 134 per share. What is the value to include in gross estate?arrow_forward
- true or false Stock investments of 50% or more in an investee should be treated using the Equity method by the investorarrow_forwardwhat is evaluate the accounting for investments when holding between 20 and 50% of equity securities of an investee from the view of an analyst of financial statements?arrow_forwardHow much gain or loss shall be recognized in Profit or Loss on the sale of Joe shares on April 30, 2020?arrow_forward
- Curtis purchased a stock with an initial share price of $140 and sold it when the share price was $119. While he owned the stock, he earned $10 in dividends. What was his total percentage return on the investment?arrow_forwardExplain what method is used to account for investments in equity securities with 20% to 50% ownership. Briefly describe how dividends received and share of net income are accounted for under this methodarrow_forwardIf an investor sells an ordinary share at a price above that which he or she originally paid, the investor is said to have earnedSelect one: a.a capital expenditure. b.a capital gain. c.an originating point. d.a dividend. explain well all point of question.arrow_forward
- Choose the letter of the correct answer: 1. In which of the following situations would an investor likely account for stock ownership in an investee using the equity method? A. The investor and the investee have many transactions with each other B. The investor owns 15 percent of the investee’s stock C. The investor and investee reside in close proximity to each other D. The investor has significant influence over the investee’s management policies 2. When the cost model/method is used to account for an investment, which of the following would not result in an adjustment to the amount recorded in the investment account? A. The investee declares a regular dividend B. The investor sells some of the stock C. The investee declares a liquidating dividend D. The stock’s market value decreases to a point where is it below the investor’s costarrow_forwardGaw Company owns 15% of the common stock of Trace Corporation and used the fair-value method to account for this investment. Trace reported net income of $110,000 for 2018 and paid dividends of $60,000 on October 1, 2018. How much income should Gaw recognize on this investment in 2018? What I have 110000 * .15= 16500arrow_forwardShareholders wealth is calculated as Select one: a. Number of shareholders X Current market price b. Number of equity shares owned X Current market price c. Number of equity shares owned + Current market price d. Number of equity shares owned ÷ Current market pricearrow_forward
- Financial & Managerial AccountingAccountingISBN:9781285866307Author:Carl Warren, James M. Reeve, Jonathan DuchacPublisher:Cengage LearningIntermediate Accounting: Reporting And AnalysisAccountingISBN:9781337788281Author:James M. Wahlen, Jefferson P. Jones, Donald PagachPublisher:Cengage Learning