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  • 1 Gaap Provides Indicators of An Investor S Inability To Exerci PDF

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    GAAP provides indicators of an investor's inability to exercise significant influence over an investee, except failure to obtain representation on the investee's board of directors. A 20% common stock interest in an investee is presumptive evidence of an ability to exercise significant influence and must be accounted for using the equity method. The cost of a 25% interest in an investee includes cash disbursed and the book value of other assets given or securities issued. A dividend received from a 25%-owned equity investee increases the investor's income and decreases the investment on the balance sheet.

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    GAAP provides indicators of an investor's inability to exercise significant influence over an investee, except failure to obtain representation on the investee's board of directors. A 20% common stock interest in an investee is presumptive evidence of an ability to exercise significant influence and must be accounted for using the equity method. The cost of a 25% interest in an investee includes cash disbursed and the book value of other assets given or securities issued. A dividend received from a 25%-owned equity investee increases the investor's income and decreases the investment on the balance sheet.

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    45 views1 page

    1 Gaap Provides Indicators of An Investor S Inability To Exerci PDF

    Uploaded by

    Anbu jaromia
    GAAP provides indicators of an investor's inability to exercise significant influence over an investee, except failure to obtain representation on the investee's board of directors. A 20% common stock interest in an investee is presumptive evidence of an ability to exercise significant influence and must be accounted for using the equity method. The cost of a 25% interest in an investee includes cash disbursed and the book value of other assets given or securities issued. A dividend received from a 25%-owned equity investee increases the investor's income and decreases the investment on the balance sheet.

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
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    of 1

    1 GAAP provides indicators of an investor s inability to

    exerci
    1. GAAP provides indicators of an investor’s inability to exercise significant influence over an
    investee. Which of the following is not included among those indicators?a. Surrender of
    significant stockholder rights by agreementb. Concentration of majority ownershipc. Failure to
    obtain representation on the investee’s board of directorsd. Inability to control the investee’s
    operating policies2. A 20 percent common stock interest in an investee:a. Must be accounted
    for under the equity methodb. Is accounted for by the cost method because over 20 percent is
    required for the application of the equity methodc. Is presumptive evidence of an ability to
    exercise significant influence over the investeed. Enables the investor to apply either the cost or
    the equity method3. The cost of a 25 percent interest in the voting stock of an investee that is
    recorded in the investment account includes:a. Cash disbursed and the book value of other
    assets given or securities issued, other than the cost of registering and issuing equity
    securitiesb. Cash disbursed and the book value of other assets given or securities issuedc.
    Cash disbursed and the fair value of other assets given or securities issued, other than the cost
    of registering and issuing equity securitiesd. Cash disbursed and the fair value of other assets
    given or securities issued4. The underlying equity of an investment at acquisition:a. Is recorded
    in the investment account under the equity methodb. Minus the cost of the investment is
    assigned to goodwillc. Is equal to the fair value of the investee’s net assets times the
    percentage acquiredd. Is equal to the book value of the investee’s net assets times the
    percentage acquired5. Jar Corporation is a 25 percent-owned equity investee of Mar
    Corporation. During the current year, Mar receives $12,000 in dividends from Jar. How does the
    $12,000 dividend affect Mar’s financial position and results of operations?a. Increases assetsb.
    Decreases investmentc. Increases incomed. Decreases incomeView Solution:
    1 GAAP provides indicators of an investor s inability to exerci
    SOLUTION-- http://accountinginn.online/downloads/1-gaap-provides-indicators-of-an-investor-s-
    inability-to-exerci/

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