1. When an investor uses the equity method to account for investment fundss in common stock, funds dividends received by the investor from the investee should be record as (D); A deduction from the investment account (AICPA adapted). 2. Sisk Company has owned 10% of Maust, Inc., for the past several years. This ownership did not all toldow Sisk to force out world-shattering influence oer Maust. Recently, Sisk acquired an additional 30% of Maust and instanter provide use the equity method. How will the investor report the flip-flop? (C); A retrospective adjustment is made to restate all prior years using the equity method. 3. In January 2008, Wilkinson, Inc., acquired 20% of the great(p) common stock of Bremm, Inc., for $700,000. This investment gave Wilkinson the ability to calculate significant influence over Bremm. Bremms assets on that realise were recorded at $3,900,000 with liabilities of $900,000. Any excess of cost over give value o f the investment was attributed to a patent having a remain useful life of 10 years. In 2008,, Bremm report loot income of $170,000. In 2009, Bremm reported net income of $210,000. Dividends of $70,000 were paid in apiece of these two years. What is the equity method balance of Wilkinsons investment in Bremm, Inc, at December 31, 2009?
A $728,000 issue away Invested 700,000 Income 2007 170,000 x 20% 34,000 2008 210,000 x 20% 42,000 Amortiza! tion 2007 (10,000) 2008 (10,000) Dividends 2007 70,000 x 20% (14,000) 2008 (14,000) Equity method balance...If you want to get a full essay, order it on our website: BestEssayCheap.com
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