Fran Song looked at the consolidated financial statements of Vixen
Fran Song looked at the consolidated financial statements of Vixen Manufacturing Limited and shook her head. "I was asked to look at the accounting for Vixen's investments," she said, "but I can't find any investments listed on the balance sheet!" Fran has just begun her work term with Potts and Palmer, a CGA firm in public practice, and she has approached you for help.
Instructions
(a) Explain to Fran what type of investments Vixen likely holds and how they have been accounted for.
(b) Explain the rationale for the reporting standards for this type of investment.
(c) Identify what other evidence there might be on the financial statements that would indicate the existence of this type of investment.
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