Question

Writing off amount of the fair value of the depreciable assets greater than the book value...

Writing off amount of the fair value of the depreciable assets greater than the book value of those assets when using the equity method will involve a debt to :

Other Comprehensive Income

Equity Method Investment

Equity method--Income/Loss

Unrealized gain on sale of Investments.

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

when the amount of fair value of the depreciable assests are greater than the book value of those assets when using the equity method will involve a debt to Unrealised gain.

as when the the book value is a cost recorded at the time of purchase of the asset and the fair value is the present value on the last day of the accounting period or on the day the asset is sold.

therefore, the when using the equity method is used it will be unrealised gain on sale of investment

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Votivo had the following securities that were acquired in Year X1: Security Type Classification Cost Fair...
Votivo had the following securities that were acquired in Year X1: Security Type Classification Cost Fair Value at 12/31/X1 Fair Value at 12/31/X2 Stock A                  12,000                    9,000                  10,200 Stock B                    5,500                    7,500                    7,000 Bond A (Trading Security)                    7,200                    8,500                    8,000 Bond B (Available for Sale)                  16,500                  15,700                  15,500 Bond C (Held to Maturity)                    6,600                  10,575                  11,350 Assume the investments in stock represent less than 20%...
1) The amount of change in the fair value of an investment classified as trading securities...
1) The amount of change in the fair value of an investment classified as trading securities is: a. reported as Investment Income or Investment Expense. b. is taken into account only at the time of sale. c. ignored unless permanent drop in value occurs. d. included within stockholders' equity section. e. included in the net income. 2) Gain or loss on sale of trading securities is calculated as a difference between the sales price and the: a. fair value or...
Which of the following statements is not true? Under the fair value through profit or loss...
Which of the following statements is not true? Under the fair value through profit or loss model, both realized and unrealized gains and losses are reported in the income statement. Under the amortized cost model, no unrealized gains or losses are reported. Non-strategic investments are purchased to generate investment income. Under the fair value through other comprehensive income model gains and losses are critical to the evaluation of management.
You are working for The Wellington Company on temporary assignment while one of the accountants is...
You are working for The Wellington Company on temporary assignment while one of the accountants is on family leave. You have been asked to review the company’s investment journal entries and provide necessary information to the accountant preparing the financial statements. PAGE 8 JOURNAL ACCOUNTING EQUATION DATE DESCRIPTION POST. REF. DEBIT CREDIT ASSETS LIABILITIES EQUITY 1 Jan. 17 Investments-Red Rock Co. Stock 40,700.00 ? 2 Cash 40,700.00 ? 3 Feb. 5 Investments-Sunset Village Bonds 37,000.00 ? 4 Interest Receivable 320.00...
The use of gross book value (GBV) for measuring the level of investment in depreciable assets...
The use of gross book value (GBV) for measuring the level of investment in depreciable assets (for purposes of calculating return on investment, ROI) is preferred by those who value the objectivity of: Multiple Choice An historical cost number. The depreciation process. Price-level adjusted data. The cost-allocation process. Current-cost information.
Fair Value Journal Entries, Available-for-Sale Investments The investments of Steelers Inc. include a single investment: 14,600...
Fair Value Journal Entries, Available-for-Sale Investments The investments of Steelers Inc. include a single investment: 14,600 shares of Bengals Inc. common stock purchased on September 12, Year 1, for $10 per share including brokerage commission. These shares were classified as available-for-sale securities. As of the December 31, Year 1, balance sheet date, the share price declined to $8 per share. a. Journalize the entries to acquire the investment on September 12 and record the adjustment to fair value on December...
Fair Value Journal Entries, Available-for-Sale Investments The investments of Steelers Inc. include a single investment: 10,100...
Fair Value Journal Entries, Available-for-Sale Investments The investments of Steelers Inc. include a single investment: 10,100 shares of Bengals Inc. common stock purchased on September 12, Year 1, for $10 per share including brokerage commission. These shares were classified as available-for-sale securities. As of the December 31, Year 1, balance sheet date, the share price declined to $7 per share. a. Journalize the entries to acquire the investment on September 12 and record the adjustment to fair value on December...
Fair Value Journal Entries, Available-for-Sale Investments The investments of Steelers Inc. include a single investment: 14,600...
Fair Value Journal Entries, Available-for-Sale Investments The investments of Steelers Inc. include a single investment: 14,600 shares of Bengals Inc. common stock purchased on September 12, Year 1, for $11 per share including brokerage commission. These shares were classified as available-for-sale securities. As of the December 31, Year 1, balance sheet date, the share price declined to $8 per share. a. Journalize the entries to acquire the investment on September 12 and record the adjustment to fair value on December...
Consider the following two separate events for a company during the year: 1. Loss on sale...
Consider the following two separate events for a company during the year: 1. Loss on sale of investments = $20. 2. Unrealized gain on investment from increase in fair value = $30. The company reports the unrealized gain as a component of other comprehensive income. By how much would these two events affect the balance of retained earnings, ignoring tax effects? Multiple Choice Decrease of $20. Increase of $10. Increase of $30. Decrease of $10.
MC Qu. 110 Carpark Services... Carpark Services began operations in 20X1 and maintains long-term investments in...
MC Qu. 110 Carpark Services... Carpark Services began operations in 20X1 and maintains long-term investments in available-for-sales ecurities. The year-end cost and fair values for its portfolio of these investments follow. The year-end adjusting entry to record the unrealized gain/loss at December 31, 20X2 is: Available-for-Sale Securities Cost Fair Value December 31, 20X1 $ 295,000 $ 277,000 December 31, 20X2 $ 376,000 $ 396,000 December 31, 20X3 $ 446,000 $ 495,000 Multiple Choice -Debit Fair Value Adjustment – Available-for-Sale (LT)...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT