Teague Corporation has the following long-term investments: 1. 60 percent of the common stock of Ariel Corporation.

Question:

Teague 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 Staffordshire Corporation

4. 100 percent of the common stock of its financing subsidiary, EQ, 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 Cannery

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

Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on... Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...