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3-21 - E3-21 Valuation of Assets under Alternative...

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Unformatted text preview: E3-21* Valuation of Assets under Alternative Accounting Theories a. Entity theory: Book Value Fair Value Increase ($240,000 x 1.00) ($50,000 x 1.00) $240,000 50,000 $290,000 b. Parent company theory: Book Value Fair Value Increase ($240,000 x 1.00) ($50,000 x .75) $240,000 37,500 $277,500 c. Proprietary theory: Book Value Fair Value Increase ($240,000 x .75) ($50,000 x .75) $180,000 37,500 $217,500 d. Current accounting practice: Book Value Fair Value Increase ($240,000 x 1.00) ($50,000 x .75) $240,000 37,500 $277,500 ...
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