Company F Has an Equity Accounted Investment (Owns 20% of the Shares)

question 31

Multiple Choice

Company F has an equity accounted investment (owns 20% of the shares) in Company K, purchased in 20X1, with a carrying amount of $200 000 at year end 20X4.Company K reports a total increase in owner's equity for the year ended 20X5 of $80 000.Which journal entry will Company F process in respect of this investment?

• A)Debit to investment in associate, credit to share of associate's profit or loss, $16 000
• B)Debit to investment in associate, credit to share of associate's profit or loss, $80 000
• C)Debit to share of associate's profit or loss, credit to investment in associate, $16 000
• D)No journal entry

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Definitions:

Repress Unpleasant Information

The involuntary forgetting or pushing aside of difficult or disturbing facts, thoughts, or memories.

Self-Reported Accounts

Information provided by individuals about themselves, often used in research to gather data on behaviors, attitudes, and experiences.

Confirmation Bias

The propensity to accumulate, perceive, select, and keep in mind information that endorses an individual's longstanding beliefs or propositions.

Cultural Knowledge

A vast store of information, accumulated within a culture, that explains how the world works and why things happen as they do.