Group case Sound Ltd. (Sound) is a manufacturer of musical...

Group case Sound Ltd. (Sound) is a manufacturer of musical instruments that is controlled by Tony Antonio. Sound was originally a private company, but it became public in 2010 when a substantial public share issue occurred. The Antonio family now holds 68% of the shares of Sound; the remaining 32% are widely distributed throughout Canada. Although Sound is an operating company, it also has substantial investments in a number of other Canadian corporations. One such investment is its ownership of 80% of the shares of Bach Burgers Inc. (Bach), a chain of fast-food outlets. Sound acquired its shares in Bach from the original founder of the company, John Sebastian, in 2019. Bach is run completely independently; Teresa Antonio, Tony's wife, is one of the members of Bach's 12-person board of directors, but otherwise Sound exercises no direction over the operations of Bach. Another investment of Sound is its 45% interest in Pits Mining Corporation (Pits). This investment was the outcome of a takeover attempt by Sound two years ago. Sound was frustrated in its attempt by a coalition of other companies in the extraction industry, which effectively blocked Sound's bid for control. Sound was left with the 45% interest that it had managed to acquire. Although Sound's block of Pits shares is by far the largest single block, Sound has not been able to gain representation on the Pits board of directors. Sound has instituted court action against Pits to force the other shareholders to admit Sound nominees to the board. Mozart Piano Corporation (Mozart) is a piano manufacturer that is 20% owned by Sound. Although Sound does manufacture musical instruments, it does not produce pianos, and Sound and Mozart frequently conduct joint marketing efforts because their products are complementary and not competitive. Mozart is a private company; all of the other shares are held by the Amadeus family. Mozart has an 80%-owned subsidiary, Leopold Klaviers Inc., which manufactures harpsichords and clavichords to be sold domestically through Mozart and internationally through other agents. Sound also owns 15% of Frix Flutes Ltd. (Frix). The 15% share was acquired several years ago to provide Frix with some new financing at a time when the company was experiencing financial difficulties. Sound also assisted Frix by licensing to Frix the rights to use patents owned by Sound. The licensing agreement can be cancelled by Sound upon six months' written notice. The only other corporate share investment held by Sound is its 100% ownership of Sound Acceptance Corporation (SAC). SAC was formed by Sound to aid its customers in purchasing Sound instruments on an instalment basis. Six of the nine SAC directors are also directors of Sound Ltd. The other three are representatives of the financial institutions that finance SAC's operations.

Discuss the manner in which Sound should account for its various investments when issuing its annual financial statements. Specify what additional information you would like to have, if any. Recommend an accounting approach for each investment, stating any assumptions that you made in arriving at your recommendations.