1) Post answers here regarding two of the following statements: Chapter 15 This module focuses on how...

1) Post answers here regarding two of the following statements:

Chapter 15

This module focuses on how to classify, account for, and report investments in both debt and equity securities. You will not be tested over the foreign currency section.

Discuss the reasons companies make investments.

Identify the classifications for non-influential investments in securities. What are the accounting basics for non-influential investments in securities, including acquisition, dividends earned, and disposition?

Explain how equity securities having significant influence are accounted for and reported in the financial statements. Include a discussion of the criterion for these securities in terms of an investee's voting stock.

Chapter 16

This module focuses on reporting and analyzing a company's cash flows. Special emphasis is directed at the statement of cash flows reported under the indirect method.

Explain the purpose and format of the statement of cash flows. Also describe its relevance to decision makers.

Define and discuss the differences between operating, investing, and financing activities.

Explain how cash flows from investing and financing activities are determined.

Solutions

Expert Solution

Discuss the reasons companies make investments.

Investments for a company can be in fixed assets, marketable securities as well as companies. Well there can be varied reasons for why the investment is made for each silo, the main reason common to all is to generate indirect income in the form of interest, dividend or profits share from the excess cash available

The equity method is used when the investor owns 20-50% of the voting stock of the investee. Thus, for the equity securities having significant influence are accounted for and reported in the financial statements as per equity method.

***I hope you required this only that is to explain any of the two statements from the given statements. If require anythig else too, let know via comment section. Thanks***

ekkarill92 answered 1 year ago

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