SOLUTIONS MANUAL for Advanced Accounting, 15th Edition by Joe Ben Hoyle, Schaefer and Doupnik | Complete 19 Chapters

Solutions2Manuals2Fors2Alls2Chapters




SOLUTIONs2 MANUALs2 FOR
ADVANCEDs2ACCOUNTINGs215THs2EDITIONs2BYs2JOEs2BENs2HOYLE,s2THOMASs2
SCHAEFERs2ANDs2TIMOTHYs2DOUPNIK
CHAPTERs21-19


CHAPTERs21s2T
HEs2EQUITYs2METHODs2OFs2ACCOUNTINGs2FORs2INVESTMENTS

Chapters2Outline

I. Fours2methodss2ares2principallys2useds2tos2accounts2fors2ans2investments2ins2equitys2se
curitiess2alongs2withs2as2fairs2values2option.

A. Fairs2values2method:s2applieds2bys2ans2investors2whens2onlys2as2smalls2per
centages2ofs2as2company‘ss2votings2stocks2iss2held.

1. Thes2investors2recognizess2incomes2whens2thes2investees2declaress2as2dividend.

2. Portfolioss2ares2reporteds2ats2fairs2value.s2Ifs2fairs2valuess2ares2unavailable,s2i
nvestments2iss2reporteds2ats2cost.

B. Costs2Method:s2applieds2tos2investmentss2withouts2as2readilys2determinables2fairs2va
lue.s2Whens2thes2fairs2values2ofs2ans2investments2ins2equitys2securitiess2iss2nots2rea
dilys2determinable,s2ands2thes2investments2providess2neithers2significants2influences2
nors2control,s2thes2investments2mays2bes2measureds2ats2cost.s2Thes2investments2re
mainss2ats2costs2unless

1. As2demonstrables2impairments2occurss2fors2thes2investment,s2or

2. Ans2observables2prices2changes2occurss2fors2identicals2ors2similars2investmentss2
ofs2thes2sames2issuer.
Thes2investors2typicallys2recognizess2itss2shares2ofs2investees2dividendss2declareds2a
ss2dividends2income.

C. Consolidation:s2whens2ones2firms2controlss2anothers2(e.g.,s2whens2as2parents2hass
2as2majoritys2interests2ins2thes2votings2stocks2ofs2as2subsidiarys2ors2controls2throug
hs2variables2interests,s2theirs2financials2statementss2ares2consolidateds2ands2repor
teds2fors2thes2combineds2entity.

D. Equitys2method:s2applieds2whens2thes2investors2hass2thes2abilitys2tos2exercis
es2significants2influences2overs2operatings2ands2financials2policiess2ofs2thes2i
nvestee.

1. Abilitys2tos2significantlys2influences2investees2iss2indicateds2bys2severals2factors
s2includings2representations2ons2thes2boards2ofs2directors,s2participations2ins2p
olicy-making,s2etc.
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©s2McGraws2Hills2LLC.s2Alls2rightss2reserved.s2Nos2reproductions2ors2distributions2withouts2thes2priors2writtens2con
sents2ofs2McGraws2Hills2LLC.

, 2. GAAPs2guideliness2presumes2thes2equitys2methods2iss2applicables2ifs220s2tos250s2perce
nts2ofs2the




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©s2McGraws2Hills2LLC.s2Alls2rightss2reserved.s2Nos2reproductions2ors2distributions2withouts2thes2priors2writtens2con
sents2ofs2McGraws2Hills2LLC.

, outstandings2votings2stocks2ofs2thes2investees2iss2helds2bys2thes2investor.

Currents2financials2reportings2standardss2allows2firmss2tos2elects2tos2uses2fairs2values2for
s2anys2news2investments2ins2equitys2sharess2includings2thoses2wheres2thes2equitys2meth
ods2woulds2otherwises2apply.s2However,s2thes2option,s2onces2taken,s2iss2irrevocable.s2Th
es2investors2recognizess2boths2investees2dividendss2ands2changess2ins2fairs2values2overs
2times2ass2income.




II. Accountings2fors2ans2investment:s2thes2equitys2method

A. Thes2investors2adjustss2thes2investments2accounts2tos2reflects2alls2changess2ins2thes
2equitys2ofs2thes2investees2company.


B. Thes2investors2accruess2investees2incomes2whens2its2iss2reporteds2ins2thes2invest
ee‘ss2financials2statements.

C. Dividendss2declareds2bys2thes2investees2creates2as2reductions2ins2thes2carryings2am
ounts2ofs2thes2Investments2account.s2Thiss2books2assumess2alls2investees2dividends
s2ares2declareds2ands2paids2ins2thes2sames2reportings2period.


III. Specials2accountings2proceduress2useds2ins2thes2applications2ofs2thes2equitys2method
A. Reportings2as2changes2tos2thes2equitys2methods2whens2thes2abilitys2tos2significantlys
2influences2ans2investees2iss2achieveds2throughs2as2seriess2ofs2acquisitions.
1. Initials2purchase(s)s2wills2bes2accounteds2fors2bys2meanss2ofs2thes2fairs2values2
methods2(ors2ats2cost)s2untils2thes2abilitys2tos2significantlys2influences2iss2attain
ed.
2. Whens2thes2abilitys2tos2exercises2significants2influences2occurss2followings2as2seri
ess2ofs2stocks2purchases,s2thes2investors2appliess2thes2equitys2methods2prospect
ively.s2Thes2totals2fairs2values2ats2thes2dates2significants2influences2iss2attaineds2i
ss2compareds2tos2thes2investee‘ss2books2values2tos2determines2futures2excesss2f
airs2values2amortizations.
B. Investees2incomes2froms2others2thans2continuings2operations
1. Thes2investors2recognizess2itss2shares2ofs2investees2reporteds2others2comp
rehensives2incomes2(OCI)s2throughs2thes2investments2accounts2ands2thes2i
nvestor‘ss2owns2OCI.
2. Incomes2itemss2suchs2ass2discontinueds2operationss2thats2ares2reporteds2separat
elys2bys2thes2investees2shoulds2bes2showns2ins2thes2sames2manners2bys2thes2inv
estor.s2Thes2materialitys2ofs2theses2others2investees2incomes2elementss2(ass2its2
affectss2thes2investor)s2continuess2tos2bes2as2criterions2fors2separates2disclosure.
C. Investees2losses
1. Lossess2reporteds2bys2thes2investees2creates2correspondings2lossess2fors2thes2investor.
2. As2permanents2declines2ins2thes2fairs2values2ofs2ans2investee‘ss2stocks2shoulds2b
es2recognizeds2immediatelys2bys2thes2investors2ass2ans2impairments2loss.
3. Investees2lossess2cans2possiblys2reduces2thes2carryings2values2ofs2thes2investme
nts2accounts2tos2as2zeros2balance.s2Ats2thats2point,s2thes2equitys2methods2ceases
s2tos2bes2applicables2ands2thes2fair-values2methods2iss2subsequentlys2used.
D. Reportings2thes2sales2ofs2ans2equitys2investment
1. Thes2investors2appliess2thes2equitys2methods2untils2thes2disposals2dates2tos2establ
ishs2as2propers2books2value.
2. Followings2thes2sale,s2thes2equitys2methods2continuess2tos2bes2appropriates2ifs2en
oughs2sharess2ares2stills2helds2tos2maintains2thes2investor‘ss2abilitys2tos2significant

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©s2McGraws2Hills2LLC.s2Alls2rightss2reserved.s2Nos2reproductions2ors2distributions2withouts2thes2priors2writtens2con
sents2ofs2McGraws2Hills2LLC.

, lys2influences2thes2investee.s2Ifs2thats2abilitys2hass2beens2lost,s2thes2fair-
values2methods2iss2subsequentlys2used.




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©s2McGraws2Hills2LLC.s2Alls2rightss2reserved.s2Nos2reproductions2ors2distributions2withouts2thes2priors2writtens2con
sents2ofs2McGraws2Hills2LLC.