[Anonymous]

Becker Question –

I’m having a hard time with the equity method. Does anyone have tips/short-cuts on calculating things? I would greatly appreciate it!

[JOKEKIDDING]

equity method is very tricky and so easy to forget and confuse with cost method. remember dividend income is a reducing of investment acct, not treated as income for the investor. try to draw a T account will make your life easier.

____________________________________________

! BEGINNING INVESTMENT ACCOUNT. (CR)

!

-SHARE OF DIV (DR) !+SHARE OF INCOME (CR)

-SHARE OF EQUIP UNDERVALUED (DR) !

_________________________________ !__________________________

! ENDING BALANCE IN INVESTMENT ACCOUNT (CR)

FAR 73(11/02/2010),74(08/31/2011), 80(11/30/2011)
BEC 75(11/30/2010)
AUD 87(01/26/2011)
REG 77(07/09/2011)

[JOKEKIDDING]

ooops.

the pic doesnt show it well.

Beg Investment Account Bal

+Ur share of net income in investee

-ur share of dividend in investee

-ur share of undervalued assets

---

= end balance in investment account

FAR 73(11/02/2010),74(08/31/2011), 80(11/30/2011)
BEC 75(11/30/2010)
AUD 87(01/26/2011)
REG 77(07/09/2011)

[See Pee A]

Try writing out the main rules and work out problems using your notes. Keep doing it until you feel comfortable and don't need the notes any more. Try this for topics that you are struggling with, it helps.

BEC 86 (08/30/11)
FAR 84 (10/13/11)
REG 88 (11/08/11)
AUD 86 (11/29/11)

Exam prep - Becker self-study

[Author]

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