How should dunbrook travel account for its investment

Assignment Help Financial Accounting

Reference no: EM131285159

Dunbrook Travel, Inc. acquired an 80% interest in Ocean Cruises on December 31 for $970,000. Dunbrook has the ability to exercise significant influence on management decisions. The Ocean Cruises stock is publically traded. During the year, Ocean Cruises reported net income of $160,000 and paid cash dividends of $40,000.

How should Dunbrook Travel account for its investment in Ocean Cruises?

Apply the equity method and report the investment at market value at year end.

Apply mark-to-market accounting and consolidate the statements at year end.

Account for the investment as a special purpose entity.

Apply the equity method and perform a full consolidation.

Reference no: EM131285159

Questions Cloud

Explain the societal impact that such concern has on health : Research a public health ethical concern. Explain the societal impact that such a concern has on population health. Describe the role of policy makers in reducing ethical concerns within a specified population.

How rate of change of mole fraction is affected by pressure : While mole concentration is the dominant property in the reaction it is much more usual for engineers to deal in mole fractions of the constituents.

Meaningful and useful context : Using what you have learned about the value of information and how it is able to be converted into a meaningful and useful context, review the case study on page 90 of the Baltzan text, "Political Microtargeting

How should firms weigh their concerns about terrorism : Would avoiding countries such as those in the Middle East make good sense in terms of economic profit? What about in terms of social profit?

How should dunbrook travel account for its investment : Dunbrook Travel, Inc. acquired an 80% interest in Ocean Cruises on December 31 for $970,000. Dunbrook has the ability to exercise significant influence on management decisions. The Ocean Cruises stock is publically traded. During the year, Ocean Crui..

Analyze a detailed viable solution that supports your thesis : Explain a detailed, viable solution that supports your thesis. This should be one or two paragraphs. State, explain, and support the second advantage to your solution. This should be one or two paragraphs.

Background materials regarding conflict and negotiation : For the Module 3 SLP you will be applying the concepts you learned in the background materials regarding conflict and negotiation to a situation from your own personal experiences. Carefully review the background materials regarding types of confl..

Governments should protect local industries : Many people feel that governments should protect local industries and local jobs with protectionist laws.- Do you feel that your country's government should do more to protect local industries? What are your reasons?

What can governments or consumers do to prevent such actions : ome companies have been criticized for moving their manufacturing to other countries.- What can governments and/or consumers do to prevent such actions?

User Account

All Pages