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Strayten Corp

question 69

Essay

Strayten Corp.is a wholly owned subsidiary of Quint Inc.Quint decided to use the initial value method to account for this investment.During 2009,Strayten sold Quint goods which had cost $48,000.The selling price was $64,000.Quint still had one-fourth of the goods on hand at the end of the year.
Required:
Prepare Consolidation Entry *G,which would have to be recorded at the end of 2010.


Definitions:

Market Efficiency

A condition in financial markets where prices fully reflect all available information, leading to assets being priced accurately and trades being executed fairly.

Financial Reporting

The process of producing statements that disclose an organization's financial status to management, investors, and the government.

Semi-Strong Form

The semi-strong form is a level of market efficiency theory suggesting that asset prices reflect all publicly available information.

Mechanistic Hypothesis

The hypothesis that share prices respond mechanistically to changes in accounting numbers, ignoring the effects of accounting policies.

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