1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Eduardwww [97]
3 years ago
6

A company acquires a subsidiary and will prepare consolidated financial statements for external reporting purposes. For internal

reporting purposes, the company has decided to apply the initial value method. Why might the company have made this decision?Consolidation is not required when the parent uses the initial value method.It is a relatively easy method to apply.GAAP now requires the use of this particular method for internal reporting purposes.Operating results appearing on the parent's financial records reflect consolidated totals.
Business
1 answer:
NemiM [27]3 years ago
7 0

Answer:

It is a relatively easy method to apply.

Explanation:

When accounting for a subsidiary, equity method is followed, whenever the shareholding percentage is equal or more than 20%.

But here, the parent company uses, initial value method for internal reporting.

Under initial value method the value of investment in subsidiary is recorded at cost, and then adjusted at year end at fair value, this clearly shows the gain or loss at each year end from such investment as per market norms.

There is no statutory requirement to follow such initial value method for internal reporting.

The correct reason therefore, is:

It is a relatively easy method to apply.

You might be interested in
Parker Corporation has a job-order costing system and uses a predetermined overhead rate based on direct labor-hours to apply ma
AnnyKZ [126]

Answer:

Unitary cost= $62.5

Explanation:

Giving the following information:

Predetermined overhead rate based on direct labor-hours to apply manufacturing overhead to jobs. At the beginning of the year, manufacturing overhead and direct labor-hours for the year were estimated at $50,000 and 20,000 hours.

Materials costs on the job totaled $4,000 and labor costs totaled $1,500 at $5 per hour.

First, we need to determine the allocated MOH:

Estimated manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base

Estimated manufacturing overhead rate= 50000/20000= $2.5 per direct labor hour

Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base= 2.5* (1500/5)= $750

Total cost= 4000 + 1500 + 750= $6,250

Unitary cost= 6250/100= $62.5

3 0
3 years ago
Starbucks has signed a contract with a television production company to have its brand featured prominently in a new situation c
vampirchik [111]

Answer: The advertising strategy used is product placement.

Explanation:

Product placement also called embedded marketing, is a form of advertising technique which involves referencing a specific brand/product done by incorporating it into another work, such as a movie or television show, with specific intent to promote the product.

product placement is the intentional incorporation of references to a product/brand in exchange for compensation or cash payment .

Product placements may range from appearances not attracting attention within an environment, to major integration and acknowledgement of the product within a program or a show.

Common categories of products placed on product placements include automobiles, consumer electronics, beverages(in the case of the example), drinks, clothing.

6 0
3 years ago
Jacob and Marla were both presented with a complex accounting issue that neither had seen before. Marla was able to look at the
devlian [24]

Answer: Generally, when trying to solve a complex accounting problem in which there are obstacles and little knowledge about the subject, the most advisable thing is to work from a conceptual framework which serves as a guide to find a reasonable answer to the problem in question. In this case Marla was clearly working with a conceptual framework, and instead Jacob was not.

4 0
3 years ago
Explain the ways in which Fiscal Policy and Monetary Policy interact by using Keynesian IS and LM curves. Discuss the impact of
statuscvo [17]

Answer and Explanation:

If demand is greater than supply, then there is inflation. Hence, the government has to devaluate its currency on net borrowings from abroad. Supply increases and price becomes stable.

The banks have to lower their bank rate and decrease CRR. When prices rise, consumption decreases and investment increases. When the interest rate is made high consumption and investment both become stable. Hence, there is full employment. Government has a fiscal policy to increase taxes and borrowings and increase the export and income rises and price becomes stable.

6 0
3 years ago
HELP!
Elza [17]

Answer:

i think the answer is true

Explanation:

6 0
3 years ago
Read 2 more answers
Other questions:
  • Janice is trying to determine what type of training should be developed for her employee Greg. Janice knows that Greg is a hands
    5·1 answer
  • Officials argue that the government needs to reduce the national debt. Which actions are most likely to accomplish this goal?
    5·1 answer
  • According to federal regulations research is eligible for exemption if
    10·1 answer
  • The aggregate-demand curve:
    11·1 answer
  • When Lofonift Inc. introduced its flagship product, an MP3 player, it captured the MP3 player market by offering its product at
    6·1 answer
  • What is the taxable amount of social security income reported on the tax return if a single taxpayer's income included only $9,4
    11·1 answer
  • Kingbird Company exchanged equipment used in its manufacturing operations plus $4,200 in cash for similar equipment used in the
    11·1 answer
  • Adams Furniture receives a special order for 10 sofas for a special price of $3,000. The direct m als and direct labor for each
    7·1 answer
  • Global​ Enterprises, Inc. signed a oneminusyear $ 42 comma 000 note payable at 9​% interest on April​ 1, 2018. If Global only ad
    5·1 answer
  • Do you think the licensing process for international medical graduates is an unnecessary hurdle meant to shield U.S. doctors fro
    13·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!