1. Recognize investors varying levels of influence or control, based on the level of stock ownership. pls take your time to give answers to this question, i need detailed answers only.
1. Recognize investors varying levels of influence or control, based on the level of stock ownership. pls take your time to give answers to this question, i need detailed answers only.
The purchase of the voting common stock of another company receives different accounting treatments depending on the level of the ownership and the amount of influence or control caused by the stock ownership. The ownership levels and accounting methods can be summarized as follows:-
Level of ownership | Initial Recording | Recording of Income |
Passive:- Generally under 20% ownership | At cost including broker’s fees | Dividends as declared (except stock dividend) |
Influential :- Generally 20% to %50% ownership | At cost including broker’s fees | Ownership share of profit (or loss) is reported. Shown as financial Investment in the financial statements. |
Controlling:- Generally over 50% ownership | At cost including direct acquisition cost. | Ownership share of profit (or loss) accomplished by merging the subsidiary income statement accounts with those of parent in the consolidation process. |
Fair value method/ Cost method:-
Investment in B 100000
Cash 100000
Cash 4000
Dividend Income 4000
At year End
Dividend income 1000
Investment in B 1000
If A determines that cumulative dividends exceed its cumulative share of income by $1,000.
Allowance to adjust available
-for-sale securities to fair value 21000
Other comprehensive income 21000
If fair value of increases to $120,000 and the Investment in B account balance is $99,000.
Equity Method:-
Investment in B 100000
Cash 100000
Cash 4000
Investment in B 4000
At year End
Cash 4000
Investment in B 4000
$100,000 cost – $4,000 dividends + $5,000 income = $101,000.
Our Advantages
Plagiarism Free Papers
All papers are written by the best professional writers to ensure 100% originality. We always provide plagiarism reports whenever we deliver completed papers.
Free Revisions
All papers by Grand Paper Writers are completed and submitted on time. This timely delivery of papers gives you time to go through the paper before the official deadline.
Title-page
As an additional service, we will provide a title page that precedes the contents of your paper. Here, you will provide your personal details.
Bibliography
We also ensure that we provide an extra page for the references or bibliographies following referencing rules.
Originality & Security
At Grandpaperwriters.com, we guarantee students for the provision of security and original work. All your personal information is handled with confidentiality and is not shared with third parties. Additionally, we ensure that we provide original content with accompanying plagiarism reports to show originality.
24/7 Customer Support
Our customer support team is always available 24/7 to provide instant responses to any queries raised by students.
Try it now!
How it works?
Follow these simple steps to get your paper done
Place your order
Fill in the order form and provide all details of your assignment.
Proceed with the payment
Choose the payment system that suits you most.
Receive the final file
Once your paper is ready, we will email it to you.
Our Services
Grandpaperwriters.com has the best professional essay writers for quality services.
Pricing
Here, a Grandpaperwriters.com, we do not compromise on the time of our clients. We always deliver all completed papers on or before the deadlines.
Communication
Admission Help & Client-Writer Contact
Grandpaperwriters.com provides an interactive portal where students can communicate directly to their writers.
Deadlines
Paper Submission
Here, a Grandpaperwriters.com, we do not compromise on the time of our clients. We always deliver all completed papers on or before the deadlines.
Reviews
Customer Feedback
Grandpaperwriters.com appreciates feedback from our clients to help us improve the delivery of essay writing services. As such, we are constantly changing our policies to ensure maximum customer and writer satisfaction.