Lesson 2 Introduction

Lesson 2 corresponds with chapter 2 of the Christensen text.  Topics covered include accounting for investments and the consolidation of wholly-owned subsidiaries acquired at book value.

Learning Objectives

After completing this lesson, you should be able to

• 2.1 explain how ownership and control can influence the accounting for investments in common stock;
• 2.2 prepare journal entries for investments carried at fair value method;
• 2.3 prepare journal entries for investments using the equity method;
• 2.4 explain differences in accounting for investments carried at fair value and investments accounted for using the equity method;
• 2.5 calculate and prepare basic consolidation entries for a simple consolidation;
• 2.6 prepare a consolidated worksheet;
• 2.7 prepare a consolidated balance sheet as of the date of acquisition of a wholly-owned subsidiary; and
• 2.8 prepare consolidated financial statements for the years after the acquisition of a wholly-owned subsidiary.

Lesson 2 Readings and Activities

By the end of this lesson, be sure you have completed the readings and activities found in the Lesson 2 Course Schedule as well as the online materials and video presentations. Additionally, please attempt any example exercises and problems provided in the lesson materials.

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