Cannalli Landscape Architecture Has Invested in Several Domestic Manufacturing Corporations

question 74

Multiple Choice

Cannalli Landscape Architecture has invested in several domestic manufacturing corporations. Which of the following investments would most likely be accounted for under the equity method on Cannalli's financial statements?

• A) 3,000 shares of the 10,000 outstanding preferred shares of Fallow Co
• B) 15,000 shares of the 50,000 outstanding common shares of Zeta Fertilizers Co
• C) 5,000 shares of the 60,000 outstanding common shares of Denman's Greenhouses Corp
• D) 20,000 shares of the 25,000 outstanding common shares of Just Pure Water Co

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Definitions:

Accounts Payable

Liabilities of a business that are due to vendors or suppliers for goods or services received that have not yet been paid for.

Cash Payments Journal

A financial journal that records all cash outflows or payments made by a business.

Subsidiary Ledger

A ledger containing all the details of a general ledger account, allowing for more detailed information and analysis of that account.

Cash Receipts Journal

A specialized accounting journal used to record all cash inflow transactions.