Advance Accounting

You work in a CPA firm. Your manager walks into your cubicle and says, “One of our clients is thinking about investing in a company. He wants to know what the difference is between the equity method and cost method of accounting.”

1. Prepare 4–5 slides in PowerPoint with speaker notes, and explain the following items:What are the GAAP requirements for reporting an investment using the equity method of accounting?Using the equity method of accounting, how would a company report the:original investmentnet incomedividends received from the invested companyCreate a simple example, and show the journal entries for recording the:investment in the booksnet incomedividends issued by the company
2. Prepare 4–5 slides in PowerPoint with speaker notes, and explain the following items:What are the GAAP requirements for reporting an investment using the cost method of accounting?Using the cost method of accounting, how would a company report the:original investmentnet incomedividends received from the invested companyCreate a simple example, and show the journal entries for recording the:investment in the booksnet incomedividends issued by the company