Entity Y has a 60% ownership interest in Entity X. Assume that Entity X typically pays dividends
Question:
Entity Y has a 60% ownership interest in Entity X. Assume that Entity X typically pays dividends equal to 40% of its income. Briefly explain whether Entity Y’s return on equity on its separate entity financial statements using the equity method would be higher, lower or the same as its return on equity on its:
(a) Separate entity financial statements using the cost method;
(b) Proportionally consolidated financial statements assuming that Entity X is a joint operation;
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 25% (4 reviews)
Entity Ys return on equity under the equity method would be a Higher than the retur...View the full answer
Answered By
JAPHETH KOGEI
Hi there. I'm here to assist you to score the highest marks on your assignments and homework. My areas of specialisation are:
Auditing, Financial Accounting, Macroeconomics, Monetary-economics, Business-administration, Advanced-accounting, Corporate Finance, Professional-accounting-ethics, Corporate governance, Financial-risk-analysis, Financial-budgeting, Corporate-social-responsibility, Statistics, Business management, logic, Critical thinking,
So, I look forward to helping you solve your academic problem.
I enjoy teaching and tutoring university and high school students. During my free time, I also read books on motivation, leadership, comedy, emotional intelligence, critical thinking, nature, human nature, innovation, persuasion, performance, negotiations, goals, power, time management, wealth, debates, sales, and finance. Additionally, I am a panellist on an FM radio program on Sunday mornings where we discuss current affairs.
I travel three times a year either to the USA, Europe and around Africa.
As a university student in the USA, I enjoyed interacting with people from different cultures and ethnic groups. Together with friends, we travelled widely in the USA and in Europe (UK, France, Denmark, Germany, Turkey, etc).
So, I look forward to tutoring you. I believe that it will be exciting to meet them.
3.00+
2+ Reviews
10+ Question Solved
Related Book For
Modern Advanced Accounting In Canada
ISBN: 9781260881295
10th Edition
Authors: Hilton Murray, Herauf Darrell
Question Posted:
Students also viewed these Business questions
-
Pumpkin Ltd is a large successful agricultural company based in Morrinsville. You are the assistant accountant with the company and have been asked to draft the companys group accounts. Tom Ato, head...
-
Read the case study "Southwest Airlines," found in Part 2 of your textbook. Review the "Guide to Case Analysis" found on pp. CA1 - CA11 of your textbook. (This guide follows the last case in the...
-
The following additional information is available for the Dr. Ivan and Irene Incisor family from Chapters 1-5. Ivan's grandfather died and left a portfolio of municipal bonds. In 2012, they pay Ivan...
-
Question 5 [ 4 points ] In the table shown below is accounting equation information as it applies to Second Time Around Clothing. Calculate the missing amounts assuming that a . Assets decreased by $...
-
Using the expectations hypothesis theory for the term structure of interest rates, determine the expected return for securities with maturities of two, three, and four years based on the following...
-
The pizzeria's cost formulas appear below: Fixed Cost per Cost per Month Pizza Cost per Delivery Pizza ingredients $ 4.50 Kitchen staff $ 5,930 Utilities $ 620 $ 0.40 Delivery person Delivery vehicle...
-
Dearborn Manufacturing Co. completed the following transactions during 2009 . Requirement Record the transactions in Dearborn's general journal. Jan. 16 Declared a cash dividend on the 4%, $100 par...
-
Myles Etter and Crystal Santori are partners who share in the income equally and have capital balances of $210,000 and $62,500, respectively. Etter, with the consent of Santori, sells one-third of...
-
In Z15 use the VLOOKUP function to select the bonus rate value based on the Annual Units Sold and the appropriate VLOOKUP table located at the top of the worksheet. Use this bonus rate to calculate...
-
Briefly describe how the merger of two or more NFPOs should be accounted for at the date of acquisition.
-
Access the 2020 consolidated financial statements in the annual report for Barrick Gold Corporation by going to the investor relations section of the companys website. Answer the questions below. For...
-
We have simplified things here by separating friction (Sec. 9.7) from heat addition (Sec. 9.8). Actually, they often occur together, and their effects must be evaluated simultaneously. Show that, for...
-
Hrubec Products, Inc., operates a Pulp Division that manufactures wood pulp for use in the production of various paper goods. Revenue and costs associated with a ton of pulp follow: Selling price $23...
-
y Working this on the www.bis.doc.gov website. "MY company makes fingerprinting powder kits for both domestic and external clients. It is a popular item in my inventory. I have a new customer in...
-
what extent do poststructuralist theories challenge traditional conceptions of culture by emphasizing the fluidity, fragmentation, and contingency of cultural identities ?
-
Martinez Corporation owns a patent that has a carrying amount of $315,000. Martinez expects future net cash flows from this patent to total $260,000. The fair value of the patent is $220,000. Prepare...
-
On the first day of the fiscal year, a company issues a $7,300,000, 11%, 8-year bond that pays semiannual interest of $401,500 ($7,300,000 x 11% x 2), receiving cash of $7,695,578. Journalize the...
-
How are the net capital losses and non-capital losses of a corporation affected when voting control of the corporation shifts from one shareholder to another?
-
Refer to the data in QS 10-1. Based on financial considerations alone, should Helix accept this order at the special price? Explain.
-
The condensed financial statements for OIL Inc. and ERS Company for the year ended December 31, Year 5, follow: On December 31, Year 5, after the above figures were prepared, OIL issued $240,000 in...
-
The July 31, Year 3, balance sheets of two companies that are parties to a business combination are as follows: In addition to the assets identified above, Ravinder Corp. attributed a value of...
-
The balance sheets of Par Ltd. and Sub Ltd. on December 31, Year 1, are as follows: The fair values of the identifiable net assets of Sub on December 31, Year 1, are as follows: Assume that the...
-
Wireless ad hoc network (WANET) is a type of local area network (LAN) that is built spontaneously to enable two or more wireless devices to be connected to each other without requiring typical...
-
1. An interest store account (DDA) is a financial balance from which kept assets can be removed whenever, without early notification. DDA records can pay interest on the saved assets yet aren't...
-
Describe a favorite social networking site you currently belong. Be sure to provide the URL, how long you have been a member, and how often you visit and participate at the site. Why do you like this...
Study smarter with the SolutionInn App