Reference no: EM132672173

Problem 1: Which financial statement ratios are typically used to assess profitability, liquidity and solvency? Identify one ratio to measure profitability, one ratio to measure liquidity and one ratio to measure solvency. How is each ratio useful for business decision making?

Problem 2: How should a private company that follows ASPE report an investment in an associate? Consider investments that are actively traded, and those that are not actively traded.

Problem 3: What is an acquisition differential? Where does it appear on the consolidated balance sheet?

Problem 4: Is a negative acquisition differential the same as negative goodwill? Explain. In your response define each of these amounts. Also describe how negative goodwill accounted for?

Problem 5: What accounts on the consolidated balance sheet differ in value between the fair value enterprise method (also known as entity theory) and the identifiable net asset method (also known as the parent company extension theory). Briefly explain why they differ under each method.