ATTENTION: I PAY EVERY MONTH TO BE ABLE TO POSTQUESTIONS HERE. THEREFORE I EXPECT...

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Accounting

ATTENTION: I PAY EVERY MONTH TO BE ABLE TO POSTQUESTIONS HERE. THEREFORE I EXPECT COMPLETE AND QUALITY ANSWERS.PLEASE READ CAREFULLY WHAT IS REQUIRED AND GIVE A THOROUGH ANSWER .DO NOT COPY AND PASTE A SOLUTION THAT IS ALREADY POSTED BY SOMEONEELSE ON CHEGG. REFRAIN FROM ANSWERING IF YOU CANNOT FULFILL MYDEMAND, AND LEAVE IT FOR SOMEONE WHO CAN ANSWER IT. DON'T WASTE MYQUESTION AS THEY ARE LIMITED.
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The company you work for is considering acquiring stock inanother company, and the CEO does not fully understand how theacquisition will be accounted for. He needs more information onwhether or not the stock being acquired will require use of theequity method of accounting for investments or requireconsolidation.
Required
Prepare a memo to the CEO explaining when an investment isaccounted for using the equity method and when consolidation isrequired. Make sure you fully cover how investments are classifiedand accounted for using both methods and that your post is in memoformat.

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To CEO of ABC Company From Accounts Manager Date 10th August 2018 Subject Investment classification and accounting Due to complexity of subject matter I MrX Accounts Manager of ABC Co is drafting a report for the better understanding of investment classification and its accounting treatment Since our company is going to make investment in near future then it becomes my responsibility to throw some light on fundamentals of investment Here I am elaborating two of them as per the current requirement Equity MethodThis method would be accounted when investor holds significant control over investee but does not exercise full control over it It involves See Answer

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In: AccountingATTENTION: I PAY EVERY MONTH TO BE ABLE TO POSTQUESTIONS HERE. THEREFORE I EXPECT COMPLETE...ATTENTION: I PAY EVERY MONTH TO BE ABLE TO POSTQUESTIONS HERE. THEREFORE I EXPECT COMPLETE AND QUALITY ANSWERS.PLEASE READ CAREFULLY WHAT IS REQUIRED AND GIVE A THOROUGH ANSWER .DO NOT COPY AND PASTE A SOLUTION THAT IS ALREADY POSTED BY SOMEONEELSE ON CHEGG. REFRAIN FROM ANSWERING IF YOU CANNOT FULFILL MYDEMAND, AND LEAVE IT FOR SOMEONE WHO CAN ANSWER IT. DON'T WASTE MYQUESTION AS THEY ARE LIMITED.ThanksThe company you work for is considering acquiring stock inanother company, and the CEO does not fully understand how theacquisition will be accounted for. He needs more information onwhether or not the stock being acquired will require use of theequity method of accounting for investments or requireconsolidation.RequiredPrepare a memo to the CEO explaining when an investment isaccounted for using the equity method and when consolidation isrequired. Make sure you fully cover how investments are classifiedand accounted for using both methods and that your post is in memoformat.