Question

Roland Corporation has the following long-term investments:
1. 60 percent of the common stock of Ariel Corporation
2. 13 percent of the common stock of Copper, Inc.
3. 50 percent of the nonvoting preferred stock of Taurus Corporation
4. 100 percent of the common stock of its financing subsidiary, PR, Inc.
5. 35 percent of the common stock of the French company Rue de le Brasseur
6. 70 percent of the common stock of the Canadian company Nova Scotia
For each of these investments, tell which of the following methods should be used for external financial reporting and why:
a. Cost-adjusted-to-market method
b. Equity method
c. Consolidation of parent and subsidiary financial statements



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  • CreatedSeptember 10, 2014
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