SOLUTION MANUAL FOR Advanced Accounting, 5th Edition Patrick E. Hopkins ISBN : ‎978-1618534323 COMPLETE GUIDE WITH RATIONALES 100% VERIFIED A+ GRADE ASSURED!!!!!NEW LATEST UPDATE!!!!!

Advanced Accounting,
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5th Edition
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by Patrick Hopkins and Halsey
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,
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, Advanced Accounting Fift JU JU



h Edition JU



By Patrick E. Hopkins and Robert F. Halsey
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Solution Manual JU




Chapter 1— Accounting for Intercorporate Investments
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1. a. If the investor acquired 100% of the investee at book value, the Equity Investment
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account is equal to the Stockholders’ Equity of the investee company. It, therefor
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e, includes the assets and liabilities of the investee company in one account. The i
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nvestor’s balance sheet, therefore, includes the Stockholders’ Equity of the investe
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e company, and, implicitly, its assets and liabilities. In the consolidation process, t
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he balance sheets of the investor and investee company are brought together. Co
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nsolidated Stockholders’ Equity will be the same as that which the investor curren
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tly reports; only total assets and total liabilities will change.
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b. If the investor owns 100% of the investee, the equity income that the investor repor
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ts is equal to the net income of the investee, thus implicitly including its revenues
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and expenses. Replacing the equity income with the revenues and expenses of th
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e investee company in the consolidation process will yield the same net income.
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2. FASB ASC 323- J U J U


10 provides the following guidance with respect to the accounting for receipt o
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f dividends using the equity method:
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The equity method tends to be most appropriate if an investment enables the
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investor to influence the operating or financial decisions of the investee. The i
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nvestor then has a degree of responsibility for the return on its investment, a
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nd it is appropriate to include in the results of operations of the investor its s
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hare of the earnings or losses of the investee. (¶323-10-05-5)
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The equity method is an appropriate means of recognizing increases or decreases me
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asured by generally accepted accounting principles (GAAP) in the economic resources
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underlying the investments. Furthermore, the equity method of accounting more close
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ly meets the objectives of accrual accounting than does the cost method because the
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Uinvestor recognizes its share of the earnings and losses of the investee in the periods
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in which they are reflected in the accounts of the investee. (¶323-10-05-4)
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Under the equity method, an investor shall recognize its share of the earnings or loss
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es of an investee in the periods for which they are reported by the investee in its fin
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ancial statements rather than in the period in which an investee declares a dividend (
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¶323-10- 35-4). JU



2023
SolutionsJU Manual,JU ChapterJ 1-1
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