Question
Last week we discussed how to account for an Investment account using the cost, partial equity and the complete equity method.Use The Cost Method, The
Last week we discussed how to account for an Investment account using the cost, partial equity and the complete equity method. Use The Cost Method, The Equity Method and answer the following:
1. Show the journal entries to account for the balances in Dividend Income and the Investment in S Company for the cost method.
2. Show the journal entries to account for the balances in Equity in Subs Income and the Investment in S Company for the Equity Method.
3. What accounts in the Consolidated Balances are different between the two illustrations?
4. Which method has the same Retained Earnings figure in both the P Company ledger accounts and the Consolidated Balances?
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Financial Accounting Tools for Business Decision Making
Authors: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso, Barbara Trenholm, Wayne Irvine
6th Canadian edition
1118644948, 978-1118805084, 1118805089, 978-1118644942
