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.
A high level of industrialization.
Answer:
Sales = $450 million
Fixed assets = $225 million
Fixed assets/Sales ratio = 50%
At 100% Capacity
Fixed assets = 100/65 x $225 million = $346.15 million
The amount of cash generated from the sale of fixed assets at book value is $346.15 million.
Explanation:
The amount of cash generated from the the sale of fixed assets at book value equals 100/65 of the original book value. The original book value was calculated based on 65% capacity. Since the company is now operating at full capacity (100%), the book value becomes 100/65 of the original book value.
Answer:
co-borrowers
Explanation:
They are joint borrowers that are sharing and have to repay a debt together.
<span>This allows the company to have a guiding philosophy that it can follow at all times. By having a company mission and a purpose, the business can make certain that all decisions and moves are made with this purpose and philosophy in mind.</span>
