Chapter 17, Problem 5CA

To determine

Equity method: Most common accounting technique used by the organization to get the access on profits gained by their investments in the other organizations is termed as equity method.

To prepare: To prepare a one-page memorandum of instructions on how SE Company should report the above facts in its December 31, 2017, balance sheet and its 2017 income statement. In your memo, identify and describe the method of valuation you recommend. Provide rationale where you can. Address your memo to the chief accountant at SE Company.

Given information: All the related information is provided in the question document.