At the beginning of 2011, Pioneer Products' ownership interest in the common stock of LLB Co. increased to the point that it became appropriate to begin using the equity method of accounting for the investment. The balance in the investment account was $44 million at the time of the change but would have been $56 million if Pioneer had used the equity method and the account had been adjusted for investee net income and dividends. How should Pioneer report the change? Would your answer be the same if Pioneer is changing from the equity method rather than to the equity method?
Answer to relevant QuestionsTurner Company purchased 40% of the outstanding stock of ICA Company for $10,000,000 on January 2, 2011. Turner elects the fair value option to account for the investment. During 2011, ICA earns $750,000 of income and on ...Tanner-UNF Corporation acquired as a long-term investment $240 million of 6% bonds, dated July 1, on July 1, 2011. Company management has the positive intent and ability to hold the bonds until maturity. The market interest ...On January 2, 2011, Sanborn Tobacco Inc. bought 5% of Jackson Industry's capital stock for $90 million as a temporary investment. Sanborn classified the securities acquired as available-for-sale. Jackson Industry's net ...Fizer Pharmaceutical paid $68 million on January 2, 2011, for 4 million shares of Carne Cosmetics common stock. The investment represents a 25% interest in the net assets of Carne and gave Fizer the ability to exercise ...Assume all of the same facts and scenarios as E12-24, except that Bloom Corporation classifies their Taylor investment as AFS.Required:1. For each of the scenarios shown in E12-24, prepare the appropriate entry(s) at ...
Post your question