Question
When using the Fair Value Method for equity investments (as currently written), at the end of the year the Parent firm would A. adjust the
When using the Fair Value Method for equity investments (as currently written), at the end of the year the Parent firm would A. adjust the Book Value of the Investment in the Subsidiary to its market value, recognize dividends from the Subsidiary as a reduction in the book value of the Investment in the Subsidiary, and recognize its share of the Net Income of the Subsidiary. B. adjust the Book Value of the Investment in the Subsidiary to its market value, recognize dividends from the Subsidiary as Dividend Revenue, and recognize the change in the fair value of the Subsidiary in its income as an Unrealized Holding Gain or Loss. C. adjust the Book Value of the Investment in the Subsidiary to its market value, recognize dividends from the Subsidiary as Dividend Revenue, and recognize its share of the Net Income of the Subsidiary. D. None of the other answers are correct.
An employee sued JR Corp. due to an injury that occurred while the employee was at work. JRs management and lawyers determined it was reasonably possible that JR would lose the lawsuit, and the amount could be reasonably estimated. JR should
- A. record the expected loss as a liability.
- B. only disclose the lawsuit in a footnote.
- C. None of the other answers are correct.
- D. neither record the liability nor disclose the lawsuit in a footnote
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