2-1
© McGraw Hill LLC. All rights reserved. No reproduction or distribution without the prior written consent of McGraw
ma ma ma ma ma ma ma ma ma ma ma ma ma ma ma ma ma ma
Hill LLC.
ma
,Solution Manual For All Chapters
ma ma ma ma
SOLUTION MANUAL FOR ma ma
ADVANCED ACCOUNTING 15TH EDITION BY JOE BEN HOYLE, THOMAS SCHAE
ma ma ma ma ma ma ma ma ma
FER AND TIMOTHY DOUPNIK
ma ma ma
CHAPTER 1-19 ma
CHAPTER 1 TH ma ma
E EQUITY METHOD OF ACCOUNTING FOR INVESTMENTS
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Chapter Outline ma
I. Four methods are principally used to account for an investment in equity securities al
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ong with a fair value option.
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A. Fair value method: applied by an investor when only a small percentage o
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f a company‘s voting stock is held.
ma ma ma ma ma ma
1. The investor recognizes income when the investee declares a dividend.
ma ma ma ma ma ma ma ma ma
2. Portfolios are reported at fair value. If fair values are unavailable, investment
ma ma ma ma ma ma ma ma ma ma ma
is reported at cost.
ma ma ma ma
B. Cost Method: applied to investments without a readily determinable fair value. Wh
ma ma ma ma ma ma ma ma ma ma ma
en the fair value of an investment in equity securities is not readily determinable, a
ma ma ma ma ma ma ma ma ma ma ma ma ma ma
nd the investment provides neither significant influence nor control, the investment
ma ma ma ma ma ma ma ma ma ma m
may be measured at cost. The investment remains at cost unless
a ma ma ma ma ma ma ma ma ma ma
1. A demonstrable impairment occurs for the investment, or
ma ma ma ma ma ma ma
2. An observable price change occurs for identical or similar investments of the sa
ma ma ma ma ma ma ma ma ma ma ma ma
me issuer. ma
The investor typically recognizes its share of investee dividends declared as dividen
ma ma ma ma ma ma ma ma ma ma ma
d income.
ma
C. Consolidation: when one firm controls another (e.g., when a parent has a majori
ma ma ma ma ma ma ma ma ma ma ma ma
ty interest in the voting stock of a subsidiary or control through variable interests,
ma ma ma ma ma ma ma ma ma ma ma ma ma
their financial statements are consolidated and reported for the combined entity.
ma ma ma ma ma ma ma ma ma ma ma
D. Equity method: applied when the investor has the ability to exercise signific
ma ma ma ma ma ma ma ma ma ma ma
ant influence over operating and financial policies of the investee.
ma ma ma ma ma ma ma ma ma
1. Ability to significantly influence investee is indicated by several factors includi
ma ma ma ma ma ma ma ma ma ma
ng representation on the board of directors, participation in policy-
ma ma ma ma ma ma ma ma ma
making, etc. ma
2. GAAP guidelines presume the equity method is applicable if 20 to 50 percent of the
ma ma ma ma ma ma ma ma ma ma ma ma ma ma
2-1
© McGraw Hill LLC. All rights reserved. No reproduction or distribution without the prior written consent of McGraw
ma ma ma ma ma ma ma ma ma ma ma ma ma ma ma ma ma ma
Hill LLC. ma
, outstanding voting stock of the investee is held by the investor.
ma ma ma ma ma ma ma ma ma ma
Current financial reporting standards allow firms to elect to use fair value for any new i
ma ma ma ma ma ma ma ma ma ma ma ma ma ma ma
nvestment in equity shares including those where the equity method would otherwise a
ma ma ma ma ma ma ma ma ma ma ma ma
pply. However, the option, once taken, is irrevocable. The investor recognizes both inv
ma ma ma ma ma ma ma ma ma ma ma ma
estee dividends and changes in fair value over time as income.
ma ma ma ma ma ma ma ma ma ma
II. Accounting for an investment: the equity method
ma ma ma ma ma ma
A. The investor adjusts the investment account to reflect all changes in the equity of
ma ma ma ma ma ma ma ma ma ma ma ma ma ma
the investee company.
ma ma
B. The investor accrues investee income when it is reported in the investee‘s finan
ma ma ma ma ma ma ma ma ma ma ma ma
cial statements.
ma
C. Dividends declared by the investee create a reduction in the carrying amount of th
ma ma ma ma ma ma ma ma ma ma ma ma ma
e Investment account. This book assumes all investee dividends are declared and
ma ma ma ma ma ma ma ma ma ma ma ma
paid in the same reporting period.
ma ma ma ma ma
III. Special accounting procedures used in the application of the equity method
ma ma ma ma ma ma ma ma ma ma
A. Reporting a change to the equity method when the ability to significantly influence
ma ma ma ma ma ma ma ma ma ma ma ma m
aan investee is achieved through a series of acquisitions.
ma ma ma ma ma ma ma ma
1. Initial purchase(s) will be accounted for by means of the fair value method (o
ma ma ma ma ma ma ma ma ma ma ma ma ma
r at cost) until the ability to significantly influence is attained.
ma ma ma ma ma ma ma ma ma ma
2. When the ability to exercise significant influence occurs following a series of sto
ma ma ma ma ma ma ma ma ma ma ma ma
ck purchases, the investor applies the equity method prospectively. The total fa
ma ma ma ma ma ma ma ma ma ma ma
ir value at the date significant influence is attained is compared to the investee
ma ma ma ma ma ma ma ma ma ma ma ma ma
‘s book value to determine future excess fair value amortizations.
ma ma ma ma ma ma ma ma ma
B. Investee income from other than continuing operations
ma ma ma ma ma ma
1. The investor recognizes its share of investee reported other comprehensi
ma ma ma ma ma ma ma ma ma
ve income (OCI) through the investment account and the investor‘s own
ma ma ma ma ma ma ma ma ma ma ma
OCI.
2. Income items such as discontinued operations that are reported separately by t
ma ma ma ma ma ma ma ma ma ma ma
he investee should be shown in the same manner by the investor. The materia
ma ma ma ma ma ma ma ma ma ma ma ma ma
lity of these other investee income elements (as it affects the investor) continue
ma ma ma ma ma ma ma ma ma ma ma ma
s to be a criterion for separate disclosure.
ma ma ma ma ma ma ma
C. Investee losses ma
1. Losses reported by the investee create corresponding losses for the investor.
ma ma ma ma ma ma ma ma ma ma
2. A permanent decline in the fair value of an investee‘s stock should be recogni
ma ma ma ma ma ma ma ma ma ma ma ma ma
zed immediately by the investor as an impairment loss.
ma ma ma ma ma ma ma ma
3. Investee losses can possibly reduce the carrying value of the investment accou
ma ma ma ma ma ma ma ma ma ma ma
nt to a zero balance. At that point, the equity method ceases to be applicable a
ma ma ma ma ma ma ma ma ma ma ma ma ma ma ma
nd the fair-value method is subsequently used.
ma ma ma ma ma ma
D. Reporting the sale of an equity investmentma ma ma ma ma ma
1. The investor applies the equity method until the disposal date to establish a pro
ma ma ma ma ma ma ma ma ma ma ma ma ma
per book value. ma ma
2. Following the sale, the equity method continues to be appropriate if enough sha
ma ma ma ma ma ma ma ma ma ma ma ma
res are still held to maintain the investor‘s ability to significantly influence the in
ma ma ma ma ma ma ma ma ma ma ma ma ma
vestee. If that ability has been lost, the fair-value method is subsequently used.
ma ma ma ma ma ma ma ma ma ma ma ma
2-24
© McGraw Hill LLC. All rights reserved. No reproduction or distribution without the prior written consent of McGraw
ma ma ma ma ma ma ma ma ma ma ma ma ma ma ma ma ma ma
Hill LLC. ma
, Solution Manual For All Chapters
ma ma ma ma
IV. Excess investment cost over book value acquired
ma ma ma ma ma ma
A. The price an investor pays for equity securities often differs significantly from t
ma ma ma ma ma ma ma ma ma ma ma ma
he investee‘s underlying book value primarily because the historical cost base
ma ma ma ma ma ma ma ma ma ma
d accounting model does not keep track of changes in a firm‘s fair value.
ma ma ma ma ma ma ma ma ma ma ma ma ma
B. Payments made in excess of underlying book value can sometimes be identified w
ma ma ma ma ma ma ma ma ma ma ma ma
ith specific investee accounts such as inventory or equipment.
ma ma ma ma ma ma ma ma
C. An extra acquisition price can also be assigned to anticipated benefits that are ex
ma ma ma ma ma ma ma ma ma ma ma ma ma
pected to be derived from the investment. In accounting, these amounts are pres
ma ma ma ma ma ma ma ma ma ma ma ma
umed to reflect an intangible asset referred to as goodwill. Goodwill is calculated
ma ma ma ma ma ma ma ma ma ma ma ma ma
as any excess payment that is not attributable to specific identifiable assets and li
ma ma ma ma ma ma ma ma ma ma ma ma ma
abilities of the investee. Because goodwill is an indefinite-
ma ma ma ma ma ma ma ma
lived asset, it is not amortized.ma ma ma ma ma
V. Deferral of intra-entity gross profit in inventory
ma ma ma ma ma ma
A. The investor‘s share of intra-
ma ma ma ma
entity profits in ending inventory are not recognized until the transferred goods are
ma ma ma ma ma ma ma ma ma ma ma ma ma
either consumed or until they are resold to unrelated parties.
ma ma ma ma ma ma ma ma ma
B. Downstream sales of inventory ma ma ma
1. ―Downstream‖ refers to transfers made by the investor to the investee. ma ma ma ma ma ma ma ma ma ma
2. Intra-
entity gross profits from sales are initially deferred under the equity method a
ma ma ma ma ma ma ma ma ma ma ma ma
nd then recognized as income at the time of the inventory‘s eventual disposal
ma ma ma ma ma ma ma ma ma ma ma ma
.
3. The amount of gross profit to be deferred is the investor‘s ownership percenta
ma ma ma ma ma ma ma ma ma ma ma ma
ge multiplied by the markup on the merchandise remaining at the end of the
ma ma ma ma ma ma ma ma ma ma ma ma ma ma
year.
C. Upstream sales of inventory ma ma ma
1. ―Upstream‖ refers to transfers made by the investee to the investor. ma ma ma ma ma ma ma ma ma ma
2. Under the equity method, the deferral process for intra-
ma ma ma ma ma ma ma ma
entity gross profits is identical for upstream and downstream transfers. The pro
ma ma ma ma ma ma ma ma ma ma ma
cedures are separately identified in Chapter One because the handling does va
ma ma ma ma ma ma ma ma ma ma ma
ry within the consolidation process.
ma ma ma ma
Answers to Discussion Questions ma ma ma
The textbook includes discussion questions to stimulate student thought and discussion. Thes
ma ma ma ma ma ma ma ma ma ma ma
e questions are also designed to allow students to consider relevant issues that might otherwi
ma ma ma ma ma ma ma ma ma ma ma ma ma ma
se be overlooked. Some of these questions may be addressed by the instructor in class to m
ma ma ma ma ma ma ma ma ma ma ma ma ma ma ma ma
otivate student discussion. Students should be encouraged to begin by defining the issue(s) in
ma ma ma ma ma ma ma ma ma ma ma ma ma
each case. Next, authoritative accounting literature (FASB ASC) or other relevant literature c
ma ma ma ma ma ma ma ma ma ma ma ma ma
an be consulted as a preliminary step in arriving at logical actions. Frequently, the FASB Acc
ma ma ma ma ma ma ma ma ma ma ma ma ma ma ma
ounting Standards Codification will provide the necessary support.
ma ma ma ma ma ma ma
Unfortunately, in accounting, definitive resolutions to financial reporting questions are not alway
ma ma ma ma ma ma ma ma ma ma ma
s available. Students often seem to believe that all accounting issues have been resolved in t
ma ma ma ma ma ma ma ma ma ma ma ma ma ma ma
he past so that accounting education is only a matter of learning to apply historically prescrib
ma ma ma ma ma ma ma ma ma ma ma ma ma ma ma
ed procedures. However, in actual practice, the only real answer is often the one that provide
ma ma ma ma ma ma ma ma ma ma ma ma ma ma ma
s the fairest representation of the firm‘s transactions. If an authoritative solution is not availabl
ma ma ma ma ma ma ma ma ma ma ma ma ma ma
e, students should be directed to list all of the issues involved and the consequences of possi
ma ma ma ma ma ma ma ma ma ma ma ma ma ma ma ma
ble alternative actions. The various factors presented can be weighed to produce a viable sol
ma ma ma ma ma ma ma ma ma ma ma ma ma ma
ution.
The discussion questions are designed to help students develop research and critical thinking
ma ma ma ma ma ma ma ma ma ma ma ma ma
2-3
© McGraw Hill LLC. All rights reserved. No reproduction or distribution without the prior written consent of McGraw
ma ma ma ma ma ma ma ma ma ma ma ma ma ma ma ma ma ma
Hill LLC. ma
© McGraw Hill LLC. All rights reserved. No reproduction or distribution without the prior written consent of McGraw
ma ma ma ma ma ma ma ma ma ma ma ma ma ma ma ma ma ma
Hill LLC.
ma
,Solution Manual For All Chapters
ma ma ma ma
SOLUTION MANUAL FOR ma ma
ADVANCED ACCOUNTING 15TH EDITION BY JOE BEN HOYLE, THOMAS SCHAE
ma ma ma ma ma ma ma ma ma
FER AND TIMOTHY DOUPNIK
ma ma ma
CHAPTER 1-19 ma
CHAPTER 1 TH ma ma
E EQUITY METHOD OF ACCOUNTING FOR INVESTMENTS
ma ma ma ma ma ma
Chapter Outline ma
I. Four methods are principally used to account for an investment in equity securities al
ma ma ma ma ma ma ma ma ma ma ma ma ma
ong with a fair value option.
ma ma ma ma ma
A. Fair value method: applied by an investor when only a small percentage o
ma ma ma ma ma ma ma ma ma ma ma ma
f a company‘s voting stock is held.
ma ma ma ma ma ma
1. The investor recognizes income when the investee declares a dividend.
ma ma ma ma ma ma ma ma ma
2. Portfolios are reported at fair value. If fair values are unavailable, investment
ma ma ma ma ma ma ma ma ma ma ma
is reported at cost.
ma ma ma ma
B. Cost Method: applied to investments without a readily determinable fair value. Wh
ma ma ma ma ma ma ma ma ma ma ma
en the fair value of an investment in equity securities is not readily determinable, a
ma ma ma ma ma ma ma ma ma ma ma ma ma ma
nd the investment provides neither significant influence nor control, the investment
ma ma ma ma ma ma ma ma ma ma m
may be measured at cost. The investment remains at cost unless
a ma ma ma ma ma ma ma ma ma ma
1. A demonstrable impairment occurs for the investment, or
ma ma ma ma ma ma ma
2. An observable price change occurs for identical or similar investments of the sa
ma ma ma ma ma ma ma ma ma ma ma ma
me issuer. ma
The investor typically recognizes its share of investee dividends declared as dividen
ma ma ma ma ma ma ma ma ma ma ma
d income.
ma
C. Consolidation: when one firm controls another (e.g., when a parent has a majori
ma ma ma ma ma ma ma ma ma ma ma ma
ty interest in the voting stock of a subsidiary or control through variable interests,
ma ma ma ma ma ma ma ma ma ma ma ma ma
their financial statements are consolidated and reported for the combined entity.
ma ma ma ma ma ma ma ma ma ma ma
D. Equity method: applied when the investor has the ability to exercise signific
ma ma ma ma ma ma ma ma ma ma ma
ant influence over operating and financial policies of the investee.
ma ma ma ma ma ma ma ma ma
1. Ability to significantly influence investee is indicated by several factors includi
ma ma ma ma ma ma ma ma ma ma
ng representation on the board of directors, participation in policy-
ma ma ma ma ma ma ma ma ma
making, etc. ma
2. GAAP guidelines presume the equity method is applicable if 20 to 50 percent of the
ma ma ma ma ma ma ma ma ma ma ma ma ma ma
2-1
© McGraw Hill LLC. All rights reserved. No reproduction or distribution without the prior written consent of McGraw
ma ma ma ma ma ma ma ma ma ma ma ma ma ma ma ma ma ma
Hill LLC. ma
, outstanding voting stock of the investee is held by the investor.
ma ma ma ma ma ma ma ma ma ma
Current financial reporting standards allow firms to elect to use fair value for any new i
ma ma ma ma ma ma ma ma ma ma ma ma ma ma ma
nvestment in equity shares including those where the equity method would otherwise a
ma ma ma ma ma ma ma ma ma ma ma ma
pply. However, the option, once taken, is irrevocable. The investor recognizes both inv
ma ma ma ma ma ma ma ma ma ma ma ma
estee dividends and changes in fair value over time as income.
ma ma ma ma ma ma ma ma ma ma
II. Accounting for an investment: the equity method
ma ma ma ma ma ma
A. The investor adjusts the investment account to reflect all changes in the equity of
ma ma ma ma ma ma ma ma ma ma ma ma ma ma
the investee company.
ma ma
B. The investor accrues investee income when it is reported in the investee‘s finan
ma ma ma ma ma ma ma ma ma ma ma ma
cial statements.
ma
C. Dividends declared by the investee create a reduction in the carrying amount of th
ma ma ma ma ma ma ma ma ma ma ma ma ma
e Investment account. This book assumes all investee dividends are declared and
ma ma ma ma ma ma ma ma ma ma ma ma
paid in the same reporting period.
ma ma ma ma ma
III. Special accounting procedures used in the application of the equity method
ma ma ma ma ma ma ma ma ma ma
A. Reporting a change to the equity method when the ability to significantly influence
ma ma ma ma ma ma ma ma ma ma ma ma m
aan investee is achieved through a series of acquisitions.
ma ma ma ma ma ma ma ma
1. Initial purchase(s) will be accounted for by means of the fair value method (o
ma ma ma ma ma ma ma ma ma ma ma ma ma
r at cost) until the ability to significantly influence is attained.
ma ma ma ma ma ma ma ma ma ma
2. When the ability to exercise significant influence occurs following a series of sto
ma ma ma ma ma ma ma ma ma ma ma ma
ck purchases, the investor applies the equity method prospectively. The total fa
ma ma ma ma ma ma ma ma ma ma ma
ir value at the date significant influence is attained is compared to the investee
ma ma ma ma ma ma ma ma ma ma ma ma ma
‘s book value to determine future excess fair value amortizations.
ma ma ma ma ma ma ma ma ma
B. Investee income from other than continuing operations
ma ma ma ma ma ma
1. The investor recognizes its share of investee reported other comprehensi
ma ma ma ma ma ma ma ma ma
ve income (OCI) through the investment account and the investor‘s own
ma ma ma ma ma ma ma ma ma ma ma
OCI.
2. Income items such as discontinued operations that are reported separately by t
ma ma ma ma ma ma ma ma ma ma ma
he investee should be shown in the same manner by the investor. The materia
ma ma ma ma ma ma ma ma ma ma ma ma ma
lity of these other investee income elements (as it affects the investor) continue
ma ma ma ma ma ma ma ma ma ma ma ma
s to be a criterion for separate disclosure.
ma ma ma ma ma ma ma
C. Investee losses ma
1. Losses reported by the investee create corresponding losses for the investor.
ma ma ma ma ma ma ma ma ma ma
2. A permanent decline in the fair value of an investee‘s stock should be recogni
ma ma ma ma ma ma ma ma ma ma ma ma ma
zed immediately by the investor as an impairment loss.
ma ma ma ma ma ma ma ma
3. Investee losses can possibly reduce the carrying value of the investment accou
ma ma ma ma ma ma ma ma ma ma ma
nt to a zero balance. At that point, the equity method ceases to be applicable a
ma ma ma ma ma ma ma ma ma ma ma ma ma ma ma
nd the fair-value method is subsequently used.
ma ma ma ma ma ma
D. Reporting the sale of an equity investmentma ma ma ma ma ma
1. The investor applies the equity method until the disposal date to establish a pro
ma ma ma ma ma ma ma ma ma ma ma ma ma
per book value. ma ma
2. Following the sale, the equity method continues to be appropriate if enough sha
ma ma ma ma ma ma ma ma ma ma ma ma
res are still held to maintain the investor‘s ability to significantly influence the in
ma ma ma ma ma ma ma ma ma ma ma ma ma
vestee. If that ability has been lost, the fair-value method is subsequently used.
ma ma ma ma ma ma ma ma ma ma ma ma
2-24
© McGraw Hill LLC. All rights reserved. No reproduction or distribution without the prior written consent of McGraw
ma ma ma ma ma ma ma ma ma ma ma ma ma ma ma ma ma ma
Hill LLC. ma
, Solution Manual For All Chapters
ma ma ma ma
IV. Excess investment cost over book value acquired
ma ma ma ma ma ma
A. The price an investor pays for equity securities often differs significantly from t
ma ma ma ma ma ma ma ma ma ma ma ma
he investee‘s underlying book value primarily because the historical cost base
ma ma ma ma ma ma ma ma ma ma
d accounting model does not keep track of changes in a firm‘s fair value.
ma ma ma ma ma ma ma ma ma ma ma ma ma
B. Payments made in excess of underlying book value can sometimes be identified w
ma ma ma ma ma ma ma ma ma ma ma ma
ith specific investee accounts such as inventory or equipment.
ma ma ma ma ma ma ma ma
C. An extra acquisition price can also be assigned to anticipated benefits that are ex
ma ma ma ma ma ma ma ma ma ma ma ma ma
pected to be derived from the investment. In accounting, these amounts are pres
ma ma ma ma ma ma ma ma ma ma ma ma
umed to reflect an intangible asset referred to as goodwill. Goodwill is calculated
ma ma ma ma ma ma ma ma ma ma ma ma ma
as any excess payment that is not attributable to specific identifiable assets and li
ma ma ma ma ma ma ma ma ma ma ma ma ma
abilities of the investee. Because goodwill is an indefinite-
ma ma ma ma ma ma ma ma
lived asset, it is not amortized.ma ma ma ma ma
V. Deferral of intra-entity gross profit in inventory
ma ma ma ma ma ma
A. The investor‘s share of intra-
ma ma ma ma
entity profits in ending inventory are not recognized until the transferred goods are
ma ma ma ma ma ma ma ma ma ma ma ma ma
either consumed or until they are resold to unrelated parties.
ma ma ma ma ma ma ma ma ma
B. Downstream sales of inventory ma ma ma
1. ―Downstream‖ refers to transfers made by the investor to the investee. ma ma ma ma ma ma ma ma ma ma
2. Intra-
entity gross profits from sales are initially deferred under the equity method a
ma ma ma ma ma ma ma ma ma ma ma ma
nd then recognized as income at the time of the inventory‘s eventual disposal
ma ma ma ma ma ma ma ma ma ma ma ma
.
3. The amount of gross profit to be deferred is the investor‘s ownership percenta
ma ma ma ma ma ma ma ma ma ma ma ma
ge multiplied by the markup on the merchandise remaining at the end of the
ma ma ma ma ma ma ma ma ma ma ma ma ma ma
year.
C. Upstream sales of inventory ma ma ma
1. ―Upstream‖ refers to transfers made by the investee to the investor. ma ma ma ma ma ma ma ma ma ma
2. Under the equity method, the deferral process for intra-
ma ma ma ma ma ma ma ma
entity gross profits is identical for upstream and downstream transfers. The pro
ma ma ma ma ma ma ma ma ma ma ma
cedures are separately identified in Chapter One because the handling does va
ma ma ma ma ma ma ma ma ma ma ma
ry within the consolidation process.
ma ma ma ma
Answers to Discussion Questions ma ma ma
The textbook includes discussion questions to stimulate student thought and discussion. Thes
ma ma ma ma ma ma ma ma ma ma ma
e questions are also designed to allow students to consider relevant issues that might otherwi
ma ma ma ma ma ma ma ma ma ma ma ma ma ma
se be overlooked. Some of these questions may be addressed by the instructor in class to m
ma ma ma ma ma ma ma ma ma ma ma ma ma ma ma ma
otivate student discussion. Students should be encouraged to begin by defining the issue(s) in
ma ma ma ma ma ma ma ma ma ma ma ma ma
each case. Next, authoritative accounting literature (FASB ASC) or other relevant literature c
ma ma ma ma ma ma ma ma ma ma ma ma ma
an be consulted as a preliminary step in arriving at logical actions. Frequently, the FASB Acc
ma ma ma ma ma ma ma ma ma ma ma ma ma ma ma
ounting Standards Codification will provide the necessary support.
ma ma ma ma ma ma ma
Unfortunately, in accounting, definitive resolutions to financial reporting questions are not alway
ma ma ma ma ma ma ma ma ma ma ma
s available. Students often seem to believe that all accounting issues have been resolved in t
ma ma ma ma ma ma ma ma ma ma ma ma ma ma ma
he past so that accounting education is only a matter of learning to apply historically prescrib
ma ma ma ma ma ma ma ma ma ma ma ma ma ma ma
ed procedures. However, in actual practice, the only real answer is often the one that provide
ma ma ma ma ma ma ma ma ma ma ma ma ma ma ma
s the fairest representation of the firm‘s transactions. If an authoritative solution is not availabl
ma ma ma ma ma ma ma ma ma ma ma ma ma ma
e, students should be directed to list all of the issues involved and the consequences of possi
ma ma ma ma ma ma ma ma ma ma ma ma ma ma ma ma
ble alternative actions. The various factors presented can be weighed to produce a viable sol
ma ma ma ma ma ma ma ma ma ma ma ma ma ma
ution.
The discussion questions are designed to help students develop research and critical thinking
ma ma ma ma ma ma ma ma ma ma ma ma ma
2-3
© McGraw Hill LLC. All rights reserved. No reproduction or distribution without the prior written consent of McGraw
ma ma ma ma ma ma ma ma ma ma ma ma ma ma ma ma ma ma
Hill LLC. ma
