question number 3

A company has been using the fair value method to account for its nvestmsnt The 0 A cumulative effect change in accounting principle mast occur O A peospective change in accounteng principis must occur O Future dividends wil cantnue to be racorded as revenue now has t now has the ability to sigrificantly infijence ab t to s ficantly nrce te n estee and the ea ty method hat been den e appro nate w ich ihe blown a 1 i, h e r Aretrospectre thange in accounting principle must occur The investor wil not receive future dindends from the rivestee QUESTION 3 Acker Ine, bought 40% of Howell Co on January 1, 2017 for $576 000 The equity method of accounting was us ed The book value and tar vakae of the net o asssts of Howeil on that date were fs 1,440,000 Acker began supplyieg invendory to Howol as follows Cost to Acker Transler Price Aount Mold bhy Howell at Year-End 2017 5 55,000 $ 70,000 75,000 S 110,000 $15,D0D Howell reported $100,000 in 2017 and $120,000 n 2018 while paying $40 000 in dwdends each year What is Acked's entity ventory gross peoft that shoukd be delerred on December 31 2017? O $20,000 $4000. o $1,600 O $8,000 O $15,000 QUESTION 4 All of the sollowing would require use of the equty method for anvestmiets ercept O Valuaion al fair value O Technological dependency Investor pantipaton rthe poky-making process of the wweste O Interthange of managerial personnel O Material intra-enaty transactions QUESTION 5