Homework SourseUnder the equity method of accounting for stock investment t
Under the equity method of accounting for stock investment, the investment initially should be recorded as
A. Cost
B. Cost minus any differential
C. Proportionate share of the fair value of the investee companies net assets
D.Proportionate share of the book value of the invest the companies net assets
A business combination in which the choir companies assets and liabilities are combined with those acquiring company into a single entityis defined as:
A. Stock acquisition
B. Leveraged buyout
C. Statutory merger
D.Reverse statutory rollup
Under the equity method of accounting for stock investment, the investment initially should be recorded as
A. Cost
B. Cost minus any differential
C. Proportionate share of the fair value of the investee companies net assets
D.Proportionate share of the book value of the invest the companies net assets
A business combination in which the choir companies assets and liabilities are combined with those acquiring company into a single entityis defined as:
A. Stock acquisition
B. Leveraged buyout
C. Statutory merger
D.Reverse statutory rollup
A. Cost
B. Cost minus any differential
C. Proportionate share of the fair value of the investee companies net assets
D.Proportionate share of the book value of the invest the companies net assets
A business combination in which the choir companies assets and liabilities are combined with those acquiring company into a single entityis defined as:
A. Stock acquisition
B. Leveraged buyout
C. Statutory merger
D.Reverse statutory rollup
Solution
Under the equity method of accounting for stock investment, the investment initially should be recorded at cost.
Correct option is A.
A business combination in which the acquired companies assets and liabilities are combined with those of acquiring company into a single entity is defined as a statutory merger.
Correct option is C.
