The equity method tends to be most appropriate if a. An investment represents 50 percent or more

Question:

The equity method tends to be most appropriate if

a. An investment represents 50 percent or more of the voting stock of an investee.

b. An investment enables the investor to influence the operating and financial decisions of the investee.

c. Majority ownership of the investee is concentrated among a small group of shareholders who operate the investee without regard to the views of the investor.

d. The investor is unable to obtain representation on the investee’s board of directors

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For book-img-for-question

Advanced Accounting

ISBN: 9781260247824

14th Edition

Authors: Joe Ben Hoyle, Thomas Schaefer, Timothy Doupnik

See More Books

Question Posted: Jul 16, 2020 09:50 AM

See More Questions

According to New Study on Collaborative Execution Finds Supply Chain Collaboration Can Improve Operational Metrics by 50 Percent or More (Bloomberg, 2012), By a ratio of nearly two to one, supply...
The financial statements for Giardi Corporation, a retailer, follow. LIABILITIES AND STOCKHOLDERS EQUITY Required: 1. Compute the four short-term liquidity ratios (rounded to two decimal places) for...
(True and False) 1. Private credit records are maintained on both individuals and organizations by various credit reporting companies. 2. Several publicly available databases provide information that...
When would you suggest that an organization engage in workflow analysis?
Mars has an average atmospheric pressure of 0.007 atm. would it be easier or harder to drink from a straw on Mars than on Earth? Explain.
If the Ad agency is currently producing 12 proposals and 15 ads, what is the opportunity cost of producing 22 proposals? (number of ads)
Suppose $X_{1} \sim N(10,25)$ and $X_{2} \sim N(5,4)$ in a population. You randomly select 100 samples from the population and assign treatment $A$ to half of the sample and $B$ to the rest. Simulate...
On January 1, 2014, Alan King decided to deposit $58,800 in a savings account that will provide funds four years later to send his son to college. The savings account will earn 8 percent, which will...
Write a function sum_list(1) that takes as input a list 1 and outputs another list q of the same length as 1 and that contains at position j the sum of all the elements from positions 0, 1, ...j,...
In March 2011, Mary Tone organized a corporation to provide package delivery services. The company, called Tone Deliveries, Inc., began operations immediately. Transactions during the month of March...
What is the difference between downstream and upstream sales? How does this difference affect application of the equity method?
On January 1, Belleville Company paid $2,295,000 to acquire 90,000 shares of OFallons voting common stock, which represents a 30 percent investment. No allocations to goodwill or other specific...
Give the names and charges of the cation and anion in each of the following compounds: (a) CaO (b) Na2SO4 (c) KClO4 (d) Fe(NO3)2 (e) Cr(OH)3.
PMF, Inc. is equally likely to have EBIT this coming year of $7 million, $13 million, or $19 million. Its corporate tax rate is 35%, and investors pay a 15% tax rate on income from equity and a 40%...
Describe the three techniques for feasibility analysis.
Craxton Engineering will either purchase or lease a new $752,000 fabricator. If purchased, the fabricator will be depreciated on a straight-line basis over seven years. Craxton can lease the...
Garnet Corporation is considering issuing risk-free debt or risk-free preferred stock. The tax rate on interest income is 32%, and the tax rate on dividends or capital gains from preferred stock is...
Western Airlines is considering a new route that will require adding an additional Boeing 777 to its fleet. Western can purchase the airplane for $221.7 million or lease it for $25 million per year....
a) You deposit $800 into a savings account that pays 2.5% compounded annually. How much will you have in the account if you leave the money there for 6 years? b) You would like to have $30,000 in an...
Write an SQL statement to display all data on products having a QuantityOnHand greater than 0.
BuyCo holds 25 percent of the outstanding shares of Marqueen and appropriately applies the equity method of accounting. Excess cost amortization (related to a patent) associated with this investment...
On January 1, 2013, Pierce, Inc., purchased 15,000 shares of Marion Company for $435,000, giving Pierce 10 percent ownership of Marion. On January 1, 2014, Pierce purchased an additional 30,000...
Matthew owns 30 percent of the outstanding stock of Lindman and has the ability to significantly influence the investees operations and decision making. On January 1, 2015, the balance in the...
In which one of the following lists are ALL items relevant to the determination of employment income? Employee RPP contributions; signing bonus on accepting employment; use of an employer - owned...
what is the shortest maturity bond issued by pfizer that is outstanding?
Manufacturing Company Balance Sheet Partial balance sheet data for Diesel Additives Company at August 31 are as follows: Finished goods inventory $89,400 Prepaid insurance 9,000 Accounts receivable...

The equity method tends to be most appropriate if a. An investment represents 50 percent or more

Question:

Step by Step Answer:

b An investment enab...View the full answer

Advanced Accounting

Related Video

Students also viewed these Business questions