Asked by Ntswaki Mereki on Jun 07, 2024
Verified
Carnes Co. decided to use the partial equity method to account for its investment in Domino Corp. An unamortized trademark associated with the acquisition was $30,000, and Carnes decided to amortize the trademark over ten years. For 2021, Carnes' Equity in Subsidiary Earnings was $78,000.Required:What balance would have been in the Equity in Subsidiary Earnings account if Carnes had used the equity method?
Partial Equity Method
An accounting method used for investments, where the investor recognizes part of the investee's income based on the percentage owned.
Unamortized Trademark
The portion of a trademark's cost that has not yet been expensed over its useful life.
Equity Method
An accounting technique used by firms to assess the profits earned through their investment in other companies by reporting these earnings as income.
- Employ and identify the distinctions among initial value, equity, and partial equity accounting strategies for investments.
- Clarify and perceive the amortization procedures for intangible assets.
Verified Answer
NG
Learning Objectives
- Employ and identify the distinctions among initial value, equity, and partial equity accounting strategies for investments.
- Clarify and perceive the amortization procedures for intangible assets.