Question

Consider the following accounting methods for long-term investments:
a. Amortized cost method
b. Fair value method
c. Equity method
d. Consolidation of parent and sub
Required:
Match one or more of these methods with each of the investments described below:
1. Mueller Inc. owns 75 percent of Johnston Corporation’s outstanding common stock.
2. Anderson Inc. owns 25 percent of Peterson Corporation’s outstanding common stock.
3. Wixon Corporation owns 12 percent of the outstanding common stock of Gilman, Inc., which is classified as available-for-sale.
4. Kohler Corporation holds a $ 40,000 long-term note receivable from Bennett, Inc., a major customer. Kohler expects to sell the note within the next two or three years.
5. Janis Products Inc. holds $ 200,000 in Gibson Manufacturing bonds. Janis plans to hold these until they mature.


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  • CreatedSeptember 22, 2015
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