Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Accounting Basics Expert

Wolf Pack Transport Co. has a 25 percent investment in Maggie Valley Depot (MVD) inc., which owns and operates a warehousing facility used for the collection and redistribution of various consumer goods. Wolf Pack paid $1,685,000 for its 25 percent interest in MVD several years ago, including a $300,000 allocation for goodwill as the only excess cost over book value acquired. Wolf Pack Transport has since appropriately applied the equity method to account for the investment. In its most recent balance sheet, because of recognized profits of excess dividends since the acquisition, Wolf Pack reported a $2,350,00 amount for its Investment in MAggie Valley Depot, Inc., account. However, compensation in the transit warehousing industry has increased in the past 12 months. In the same area as the MVD facility, a competitor company opened two additional warehouses that are much more conveniently located near a major interstate highway. MVD's revenues declined 30 percent as customers shifted their business to the competitor's facilities and the prices for warehouse service declined. The market value of Wolf PAck's stock ownership in MVD fell to $1,700,000 from a high last year of $2,500,000. MVD's management is currently debating ways to respond to these events but has yet to formulate a plan.

1. What guidance does the FASB ASC provide for equity method investment losses in value?

2. Should Wolf Pack recognize the decline in the value of its holdings in MVD in its current year financial statements?

3. Should Wolf Pack test for impairment of the value it had initially assigned to goodwill?

 

Accounting Basics, Accounting

  • Category:- Accounting Basics
  • Reference No.:- M945030

Have any Question? 


Related Questions in Accounting Basics

Problem 1pringle corporation has been authorized to issue

Problem 1: Pringle Corporation has been authorized to issue 23,300 shares of $100 par value, 8%, noncumulative preferred stock and 1,007,600 shares of no-par common stock. The corporation assigned a $4 stated value to th ...

1 the manufacture of herbal health tonic is a competitive

1. The manufacture of herbal health tonic is a competitive industry. The manufacturing facilities have an annual output of 100,000 gallons. Operating costs are $2 per gallon. A 100,000 gallon capacity plant costs $500,00 ...

Question 1 owners of business firms are the only people who

Question 1 Owners of business firms are the only people who need accounting information. Question 2  Requiring employees to take vacations is a weakness in the system of internal controls because it does not promote oper ...

Conduct a cost analysis of gas versus electric vehicle find

Conduct a cost analysis of gas versus electric vehicle. Find the break-even point assuming gasoline is $3.00/gallon with an average of 22 miles per gallon that costs $25,000. Compared to an electric vehicle for $35,000 t ...

Question 1under the allowance method bad debt expense is

Question 1 Under the allowance method, Bad Debt Expense is recorded A. as an estimate. B. when an individual account is written off. C. several times during the year as needed. D. None of the above Question 2 Which amoun ...

Assignmentbackgroundphoenix advertising with its main

Assignment Background Phoenix Advertising, with its main headquarters in Charlotte, North Carolina, serves clients that include banks, insurance companies, and retail chains. You're the vice president of human resources ...

Q1 what was the logic behind the gentiles who asked for

Q.1 what was the logic behind the gentiles who asked for chanja Finkelsztjains world goods( and similar anecdotes) Q.2 how does the author regard the plundering of the Jews? Q.3 Why did so many Jews leave valuables with ...

Accounting individual assignmentpart 1 - royal oak taxation

ACCOUNTING INDIVIDUAL ASSIGNMENT PART 1 - Royal Oak Taxation Advisory Service has the following transactions for the month of December 2016: Dec. 1 Commenced business by depositing $50 000 in a bank account in the name o ...

Exercise 1north company has completed all of its operating

Exercise 1 North Company has completed all of its operating budgets. The sales budget for the year shows 50,120 units and total sales of $2,128,200. The total unit cost of making one unit of sales is $22. Selling and adm ...

Review the provisions of the sarbanes-oxley act of 2002 to

Review the provisions of the Sarbanes-Oxley Act of 2002 to address the accounting scandals in the late 1990s and early 2000s (Enron, WorldCom, etc.). Identify the provisions that you believe made the most significant imp ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

WalMart Identification of theory and critical discussion

Drawing on the prescribed text and/or relevant academic literature, produce a paper which discusses the nature of group

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro