Friday, July 9, 2010

Advanced Accounting: Chapter 2 E2-1 General Questions

BA 459

Advanced Accounting: Beams, Clement, Anthony, Lowensohn
Floyd A. Beams
Robin P. Clement
Joseph H. Anthony
Suzanne Lowensohn
9th Edition 10th Edition
Chapter 2

Exercise 2-1 (E2-1)
General questions
1. Indicators of an investor company’s inability to exercise significant influence over an investee are provided in FASB Interpretation No. 35. Which of the following is not included among those indicators?

2. A 20% common stock interest in an investee company:

3. The cost of a 25% interest in the voting stock of an investee that is recorded in the investment account includes:

4. The underlying equity of an investment at acquisition:

5. Jarret Corporation is a 25%-owned equity investee of Marco Corporation. During the current year, Marco receives $12,000 in dividends from Jarret. How does the $12,000 dividend affect Marco’s financial position and results of operations?

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