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As you discuss the tax-free sale with Ruth and Bob, you present several accounting methods for the acquisitioncost basis, equity basis or...

• As you discuss the tax-free sale with Ruth and Bob, you present several accounting methods for the acquisition—cost basis, equity basis or consolidated basis. In your presentation, include the following information: Why or why not should each method be used? Which accounts are involved in the accounting? How is the accounting carried on Tribbs’ balance sheet? If dividends are involved, how are they taxed? Recommendation: How would you account for the acquisition?

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