会计学原理英文课件12(精品·公开课件).ppt

* * * * * * * * * * * * When Purchase Dr. Investment in associated companies (A) Cr. Cash (A) When investee reports income Dr. Investment in associated companies (A) Cr. Equity in earnings of associated co. (R,SE) When investee reports loss Dr. Equity in loss of associated companies (R,SE) Cr. Investment in associated companies (A) When receive dividend Dr. Cash (A) Cr. Investment in associated companies (A) Investments For Significant Influence: Equity Method Investments For Significant Influence: Equity Method On January 2, TeleCom, Inc. acquires a 30% interest in S at a cost of $2,000,000. Prepare the journal entry to record TeleCom’s investment. TeleCom credits Equity in Investee Earnings (an income statement account) for its share of S’s earnings. Investments For Significant Influence: Equity Method S net income for the year is $1,600,000. TeleCom’s 30% share is $480,000. Record TeleCom’s share of S’s income. Dividends are not revenue under the equity method. They are treated as a reduction of the investment account. Investments For Significant Influence: Equity Method On March 31 of the next year, S pays $200,000 in dividends, $60,000 (30%) of which goes to TeleCom. Record TeleCom’s receipt of the dividend. Investments For Control - Consolidated Statement Used when an investor can control over an investee.  50% outstanding shares What Are Consolidated Statements? The acquiring company is the parent. The company acquired is the subsidiary. Parent and subsidiaries are separate legal entities Consolidated statements combine two or more companies into a single set of statements. Any transactions between the parent and subsidiary must be eliminated when preparing consolidated financial statements. Occurs when onecompany buysanother company. The amount by which thepurchase price exceeds the fairmarket value of net assets acquired. Only purchased goodwill is an intangible asset. Goodwill Recording a Merger Recordi