Acct Notes November 30

Acct Notes November 30 - Acct Notes November 30, 2007...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Acct Notes November 30, 2007 -market value of stocks is higher than value recorded on company’s books -because of value of management, initially undervalued, significant investments in real estate, -If you buy 30% of a company’s stock, you pay more than on the books Price paid -Your share of their book (30% of NAV or Total Equity) Excess purchase price over underlying book value (depreciable asset appreciation) – (diff. between their historical cost and mkt value today) (non-depreciable asset appreciation) = land Goodwill -you need three journal entries, but you can put them in one Dep. Assets = estimated remaining life of 5 years (example) If company marks to market (depreciation is greater, net income is less) 12/31 Investee Income 30,000 Invest in [goods] 30,000 -ADJUSTMENT to record depr. On excess purchase price FINISHES EQUITY METHOD Movements between trading portfolio and avail. For sale are at FMV the day you move it, any gain or loss is recorded in income -if prior avail. For sale, get rid of any entries (unrealized gain or loss)
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 06/09/2008 for the course ACCT 312 taught by Professor Praeter during the Spring '08 term at Clemson.

Page1 / 2

Acct Notes November 30 - Acct Notes November 30, 2007...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online