Diversified Corporation has the following long-term investments: LO 1 Methods of Accounting for LO 2 Long-Term Investments

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Diversified Corporation has the following long-term investments:

LO 1 Methods of Accounting for LO 2 Long-Term Investments Corporation's records to reflect this information. Corporation for \(2,400,000\) in cash, an amount sufficient to exercise significant influence over Burke Corporation's activities. On December 31, Romano determined that Burke paid dividends of 400,000 but incurred a net loss of 200,000 for \(20 x x\). Prepare journal entries in Romano 1. 60 per cent of the ordinary shares of the American company Calcor Corporation 2. 13 per cent of the ordinary shares of the British company Virgin Atlantic 3. 50 per cent of the nonvoting preference shares of the American company Camrad Corporation 4. 100 per cent of the ordinary shares of its financing subsidiary, DCF.

5. 35 per cent of the ordinary shares of the French company Maison de Boutaine 6. 70 per cent of the ordinary shares of the Canadian company Alberta Mining Company For each of these investments, state which of the following methods should be used for external financial reporting.

a. Lower of cost and market method.

b. Equity method

c. Consolidation of parent and subsidiary financial statements LO 3 Elimination Entry for a

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Financial Accounting A Global Approach

ISBN: 9780395839867

1st Edition

Authors: Sidney J. Gray, Belverd E. Needles

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