ToysRUs Inc. is a major retailer of toys in the United States. A recent balance sheet disclosed

Question:

Toys€œR€Us Inc. is a major retailer of toys in the United States. A recent disclosed a long-term investment in Toys-Japan, a public company trading on the Tokyo over the-counter market. The disclosure for two comparative years was as follows:

In addition, the Toys€œR€Us income statement disclosed equity earnings in the Toys-Japan investment as follows (in millions):

The notes to the financial statements provided the following additional information about this investment:
The company accounts for its investment in the common stock of Toys-Japan under the €œequity method€ of accounting since the initial public offering on April 24, 2000. The quoted market value of the company€™s investment in Toys-Japan was $283 at February 2, 2002.
a. Explain the change in the investment in Toys-Japan account for fiscal year ended
February 2, 2002.
b. Why is the Investment in Toys-Japan not recognized at marketvalue?

Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial... Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on... Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...