The Following Analysis Is Based on Information Obtained from 2012

question 131

Essay

The following analysis is based on information obtained from 2012 financial statements of Lake Company,River Corporation,and Ocean Company.

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Definitions:

Investee

A company in which an investor holds a minor equity or debt stake, implying a level of influence but not full control.

Fair Value

An estimate of the market value of an asset or liability, based on the current price to sell an asset or settle a liability in an orderly transaction.

Controlling Influence

The power or authority to govern or direct the management and policies of another entity without necessarily having majority ownership.

Voting Stock

Shares that give the shareholder the right to vote on matters of corporate policy and the election of the board of directors.