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BE12.7 (L03) Using the data presented in BE12.6, assume that Rook Corporation is a private company and reports under ASPE. It has chosen to account

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BE12.7 (L03) Using the data presented in BE12.6, assume that Rook Corporation is a private company and reports under ASPE. It has chosen to account for its investment in Hook Ltd. using the cost model because the shares do not trade in an active market. (a) Record each of the transactions given in BE12.6 under this assumption. (b) How much income would Rook now report for the year? (e) Explain why this differs from your answer in BE 12.6. Determine investment account balances; indicate statement presentation T. BE12.7 (L03) Using the data presented in BE12.6, assume that Rook Corporation is a private company and reports under ASPE. It has chosen to account for its investment in Hook Ltd. using the cost model because the shares do not trade in an active market. (a) Record each of the transactions given in BE12.6 under this assumption. (b) How much income would Rook now report for the year? (e) Explain why this differs from your answer in BE 12.6. Determine investment account balances; indicate statement presentation T

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