Long term investments - adjusted to market and equity

Assignment Help Financial Accounting

Reference no: EM13378472

Long term Investments - adjusted to market and equity methods.

On January 1, 2010, Cavalier Corporation purchased 8 percent of the voting stock of Onion Corporation for $500,000 and 45 percent of the voting stock of Dross Corporation for $4,000,000. During the year, Onion Corporation had net income of $200,000 and paid dividends of $80,000. Dross Corporation had net income of $600,000 and paid dividends of $400,000. The market value did not change for either company during the year.

Which investment should be accounted for using the adjusted to market method?

Which investment should be accounted for using the equity method?

At what amount should each investment be carried on the balance sheet at the end of the year? Explain your answers and show any

calculations necessary to arrive at your answers.

Reference no: EM13378472

Questions Cloud

Explain what the flowing statement by handel 1982 p 36 : explain what the flowing statement by handel 1982 p. 36 means and provide an argument to either support or oppose the

Polycorp is considering an investment in new plant of 3 : polycorp is considering an investment in new plant of 3 million. the project will be financed with a loan of 2000000

Financial accounting is fairly heavily regulated in : financial accounting is fairly heavily regulated in australia. there are numerous corporations act requirements and

Cash flows from operating activities indirect methodfor the : cash flows from operating activities indirect methodfor the year ended june 30 2010 net income for soak company was

Long term investments - adjusted to market and equity : long term investments - adjusted to market and equity methods.on january 1 2010 cavalier corporation purchased 8

Recording a bond issue and interestnora corporation issued : recording a bond issue and interestnora corporation issued 8.5 five year bonds with a face value of 8000000 on march 1

The following data are available for sellco for the fiscal : the following data are available for sellco for the fiscal year ended on january 31 2011sales . . . . . . . . . . . . .

Alternative financing plansfly co is considering the : alternative financing plansfly co. is considering the following alternative financing plansincome tax is estimated at

Common stock transactions and stockholders equityon march 1 : common stock transactions and stockholders equityon march 1 2010 blank company began operation with a corporate charter

User Account

All Pages