Q1 According to IAS 28, Investments in Associates and Joint Ventures, an investment classified as a joint venture should be equity accounted in the consolidated financial statements of the investor company. Which statement below can be used to describe the Equity accounting method? Select one: a. It is an accounting method whereby an investment is initially recorded at cost and is subsequently adjusted for post-acquisition changes in the investor’s share of the net assets of the investee. b. It is an accounting method whereby an investment is initially recorded at cost and is subsequently adjusted for amortization over an agreed period of time. c. It is an accounting method whereby an investment is initially recorded at fair value and is subsequently adjusted for post-acquisition changes in the investor’s share of the net assets of the investee. d. It is an accounting method whereby an investment is initially recorded at fair value and is subsequently adjusted for amortization over…

__________ securities are investments in preferred or common stock that represent ownership in a company. a.Equity b.Debt c.Market d.Investment

Which of the following best represents the hierarchy of creditor and stockholder claims? Group of answer choices A. Senior secured debt, subordinated debentures, common stock B. Senior debentures, subordinated debentures, junior secured debt C. Common stock, senior secured debt, subordinated debentures D. Preferred stock, secured debt, debentures

2. Each of the three categories of investments in debt and equity securities have similar accounting for all of the following transactions, except for a. initial recording of costb. recognition of dividend and interest incomec. recognition of realized gains or losses on salesd. recognition of unrealized holding gains and losses

1. Identify the most acceptable value of share capital in exchange of non-cash asset.  options •Fair market value of share issued •Fair market value of non-cash asset received •Par value of share capital issued. •Carrying value of the non-cash asset received. 2. Which of the following is included in the equity section of a corporate business?  •Investment in equity shares •Treasury shares •Subscription Receivable – current •Unearned revenue

If a company have a patent and it will not generate probable future economic benefits, in this case the company will: Select one: a. Derecognition. O b. None of the options. c. Not recorded. O d. Record it as an asset

Match each of the following terms with the correct definition: a. additional paid-in capitalb. issued and outstandingc. retained earningsd. treasury stocke. authorized share capitalf. par value Correct Definitions:A. The price at which each share is recorded in the company’s booksB. Held by investorsC. Cumulative amount of profits that have been plowed backD. The difference between the amount of cash raised by an equity issue and the par value of the issueE. The maximum number of shares that can be issued without shareholder approvalF. The amount that the company has spent buying back stock that it has not subsequently resold

Match each of the following terms with the correct definition: a. additional paid-in capitalb. issued and outstandingc. retained earningsd. treasury stocke. authorized share capitalf. par value Correct Definitions:A. The price at which each share is recorded in the company’s booksB. Held by investorsC. Cumulative amount of profits that have been plowed backD. The difference between the amount of cash raised by an equity issue and the par value of the issueE. The maximum number of shares that can be issued without shareholder approvalF. The amount that the company has spent buying back stock that it has not subsequently resold SELECTED FORMULAS PVIFA = PVIF = requity = rassets + (rassets – rdebt) PV of tax shield = = Tc *DWACC = (1-Tc) * *() + *()

Describe in general the various methods of accounting for an investment in equity shares of another company.