On January 1, 2018, Jordan Inc. acquired 30% of Nico Corp. Jordan used the equity method to account for the investment. On January 1, 2019, Jordan sold two-thirds of its investment in Nico. It no longer had the ability to exercise significant influence over the operations of Nico. How should Jordan account for this change?
A. Jordan should report the effect of the change from the equity to the fair-value method as a retrospective change in accounting principle.
B. Jordan should restate the prior years' financial statements and change the balance in the investment account as if the fair-value method had been used since 2018.
C. Jordan should use the fair-value method for 2019 and future years, but should not make a retrospective adjustment to the investment account.
D. Jordan has the option of using either the equity method or the fair-value method for 2018 and future years.
E. Jordan should continue to use the equity method to maintain consistency in its financial statements.
Answer: C
You might also like to view...
The evaluation stage of management process includes comparing actual with the established standards
Indicate whether the statement is true or false
A firm's product-market screening criteria for evaluating existing plans and possible new opportunities should consider
A. the firm's strengths. B. trends in the market environment. C. the objectives of top management. D. the firm's weaknesses. E. All these answers are correct.
What is the continuous process improvement model?
A. A standardized set of activities that accomplish a specific task, such as processing a customer's order. B. Result in a product or service that is received by an organization's external customer. C. Invisible to the external customer but essential to the effective management of the business and include goal setting, day-to-day planning, performance feedback, rewards and resource allocation. D. Attempts to understand and measure the current process and make performance improvements accordingly.
Thirty percent of a magazine's subscribers are female. A random sample of 50 subscribers is taken. Answer the following questions using Excel:
a. What is the probability that the proportion of females from this sample is at most .25? b. What is the probability that the proportion of females from this sample is between .22 and .28? c. What is the probability that the proportion of females from this sample is within .03 of the population proportion?