Open Question: Help with cost-adjusted-to-market method and equity method PLEASE?

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Ok I really need some help with this. I’m really stuck, I’ve tried everything I can think of and all my answers come up wrong. I’d really appreciate it if someone can explain this to me….. On January 1, Rourke Corporation purchased, as long-term investments, 8 percent of the voting stock of Taglia Corporation for $ 250,000 and 45 percent of the voting stock of Curry Corporation for $ 2 million. During the year, Taglia Corporation had earnings of $ 100,000 and paid dividends of $ 40,000. Curry Corporation had earnings of $ 300,000 and paid dividends of $ 200,000. The market value did not change for either investment during the year. 1. At what amount should the investment be carried on the balance sheet at year end using the cost-adjusted-to-market method? 2. At what amount should the investment be carried on the balance sheet at year end using the equity method?

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http://answers.yahoo.com/question/index?qid=20090420095132AAcL1zJ






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Comments (1)

Nick Genovese

February 16th, 2011 at 2:58 pm    


Under the cost adjusted to market method of accounting for investments in financial statements,can gains be recognized or just losses?

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