Control o More than 50 voting stock ownership is presumptive evidence of control. Prepare consolidated financial statements 2-6
2-6 Control More than 50% voting stock ownership is presumptive evidence of control. Prepare consolidated financial statements
Stock Investments-Investor Accounting and reporting 2: Fair value/cost method
2-7 2: Fair Value/Cost Method Stock Investments – Investor Accounting and Reporting
Fair Value /Cost Methods(P30) o July 1, Pilzer buys 2, 000 shares of Sud for $100,000 ●S:NI:$50,000,Div:$20.000 Inⅴ estment in Sud 100.000 Cash 100.000 o NoV. 1. Pilzner receives $4000 in dividends from Sud Cash 4.000 Dividend income 4.000 2-8
2-8 Fair Value /Cost Methods（P30） July 1, Pilzner buys 2,000 shares of Sud for $100,000. S: NI:$50,000, Div: $20,000 Nov. 1, Pilzner receives $4,000 in dividends from Sud. Investment in Sud 100,000 Cash 100,000 Cash 4,000 Dividend income 4,000
fair value method. at Year-end o Assume that the stock is either nonmarketable or has a market price $50 per share so that no revaluing is needed o entry. o Assume fair value of increases to s120,000 Allowance to adjust available-for-sale 20.000 securities to market value(+A) Other comprehensive income Unrealized gain on available-for- 20.000 sale securities(+SE)
Assume that the stock is either nonmarketable or has a market price $50 per share so that no revaluing is needed. No entry. Assume fair value of increases to $120,000 Fair Value Method, at Year-end Allowance to adjust available-for-sale securities to market value (+A) 20,000 Other comprehensive income - Unrealized gain on available-forsale securities (+SE) 20,000
Stock Investments- Investor Accounting and Reportin 3: Equity Method
2-10 3: Equity Method Stock Investments – Investor Accounting and Reporting