List and briefly describe the method used to account for investments in equity securities with 50% or more ownership
What will be an ideal response
Consolidation accounting is used by the investing company to account for equity securities that represent 50% or more ownership of the investee's outstanding voting stock. Consolidation accounting is the way to combine the financial statements of two or more companies that have the same owners. Consolidated financial statements combine the balance sheets, income statements, and statements of cash flows of the parent company (the investor) with those of its controlling interest affiliates (the investees). The final outcome is a single set of financial statements, as if the parent and its subsidiaries were the same entity.
You might also like to view...
Which of the following refers to an employer's obligation to do something to enable an otherwise qualified person to perform a job?
A. Reverse discrimination B. Reasonable accommodation C. Disparate impact D. Adverse action
Buffalo, Inc reported sales revenue for 2017 of $903,000
The products were sold with a nine-month warranty. Members of Buffalo's management estimate that the cost of the warranty will be equal to 7% of sales revenue. Which of the following will be included in the entry to record the actual amounts paid out as a result of warranty claims? A) a debit to Estimated Warranty Payable for the actual amount of payments B) a credit to Estimated Warranty Payable for $63,210 C) a debit to Estimated Warranty Payable for $63,210 D) a debit to Warranty Expense for the actual amount of payments