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6 July, 22:56

Armando Company owns 17,000 of the 70,000 shares of common stock outstanding of Tito Company and exercises a significant influence over its operating and financial policies. The investment should be accounted for by the

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  1. 6 July, 23:35
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    Equity method

    Explanation:

    For accounting the investment, first we have to determine the percentage which is shown below:

    = Owned shares : outstanding shares of common stock * 100

    = 17,000 : 70,000 * 100

    = 24.28%

    By finding out the percentage, the investment is accounting by the equity method as the common stock outstanding shares is mentioned in the question
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